4 Use the information on the UK wholesale market for roses in Problem 1 to:

a Explain who gains and who loses from free international trade in roses compared with a situation in which UK citizens buy only roses grown in the UK. b Draw a graph to illustrate the gains and losses from free trade.

c Calculate the gain from international trade.

Wholesalers of roses (the firms that supply your local flower shop with roses for Valentine’s Day) buy and sell roses in containers that hold 120 stems. The table provides information about the wholesale market for roses in the UK. The demand schedule is the wholesalers’ demand and the supply schedule is the UK rose growers’ supply.

Wholesalers can buy roses at auction in Aalsmeer, Holland, for £125 per container.

Transcribed Image Text:

Price (pounds per container) Quantity demanded Quantity supplied (millions of containers per year) 100 15 125 12 52 150 9 175 6 246 02 0 200 3 8 225 0 10