Why does free and voluntary trade increase wealth?

Free and voluntary trade is the basis of a capitalistic society where people are free to make whatever product they want. This increases competition.

If a person or company is able to innovate a new or improved technology that sets them apart from their competitors they would expect to sell more and create more wealth for themselves.

Thing about the pharmaceutical industry. If you find a drug that would cure cancer, you would expect to sell a lot of this drug because no one else has been able to do that thus far. If you are able to sell a product that no one has, you can charge a higher price and customers will still buy your product, thus creating wealth.

in 2001, dell computer became the world’s largest personal computer vendor, continuing to

gain market share and post profits in an industry struggling with slumping sales and billions of

dollars in losses. dell sells 90% of its pcs directly to the final customer, largely bypassing the

reseller channel that accounts for most of the world’s pc sales. this direct customer relationship

is the key to dell’s business model, and provides distinct advantages over the indirect sales

model. dell’s direct relationship with the customer allows it to tailor its offerings to customer

needs, offer add-on products and services, and use the internet to offer a variety of customer

services. in addition, dell’s pcs are built to customers’ specifications upon receipt of an order,

giving dell additional advantages over indirect pc vendors who must try to forecast demand and

ship products based on those forecasts. dell’s direct sales and build-to-order model has achieved

superior performance in the pc industry in terms of inventory turnover, reduced overhead, cash

conversion, and return on investment (kraemer, et al., 2000).

explanation:

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