Comparative advantage stems from differences in the relative costs of producing goods and services.

Question

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Comparative advantage is the ability of a country or company to produce a particular good or service at a lower opportunity cost than its competitors. It is based on the idea that countries or companies should specialize in producing goods or services for which they have a lower opportunity cost and trade with other countries or companies for goods or services for which they have a higher opportunity cost. The differences in opportunity costs arise from differences in the relative costs of producing goods and services.

Comparative Advantage Stems from Differences in the Relative Costs of Producing