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When two countries specialize in producing the goods for which they have a comparative advantage and?

Sagot :

It can be mutually advantageous for two nations to specialize in goods for which they have a relative advantage and then trade with one another. Absolute advantage is the basis of the potential gains from specialization and trade.

What does it mean for a producer to have comparative benefit?

Comparative advantage is a requirement of a producer where it is better suited for the production of one good than another good. Good A can be made more efficiently than good B, for example. This comparison is done in terms of the option costs of each good, not in terms of pure production costs.

To learn more about Comparative advantage , refer

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