The principle of comparative advantage applies to interactions

Question

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The principle of comparative advantage applies to both interactions between people and business production decisions. It states that countries or individuals should specialize in producing goods or services in which they have a lower opportunity cost and trade with others who have a higher opportunity cost, resulting in mutual gains from trade. This principle can be applied to both international trade between countries and business decisions about what to produce and how to allocate resources within a company.

The Principle of Comparative Advantage Applies to Interactions