However in terms of welfare gain, participation in the union is obviously a step in the right direction.

This obviously cannot be counted as a social welfare gain (or loss).

Then the cross-hatched area can now be counted as a welfare gain.

Establishing free movement of capital and labour can also be shown to lead to net welfare gains.

This leaves areas 2 and 5 as net welfare gains of allowing free movement of labour.

Removal of barriers to capital mobility can also lead to net welfare gains.

Specifically, in the Thress model, the peak occurs at a discount of 7 and the welfare gain is only $6 million.

It is interesting to look at the makeup of these welfare gains.

It is clear that the efficient discount moves closer to the cost figure of 6 and that the welfare gains become much smaller.

The analytic problem, for competition policy, is that these strategies involve both welfare gains and losses.