Question

Describe the benefits of an comparative advantage

Answer 1

Countries trade because of comparative advantage, which allows them to produce goods or services more efficiently than other countries. This theory helps explain the benefits of trade and the role of opportunity cost.

Step-by-step explanation:

The theory of comparative advantage explains why countries trade: they have different comparative advantages. It shows that the gains from international trade result from pursuing comparative advantage and producing at a lower opportunity cost. Comparative advantage occurs when one state can create a particular good or service in a more cost-effective manner than a second state.

Answer 2

The person/company is able to carry out their service or sell their goods at a lower price than similar businesses people will want to buy at a lower price which means this is an opportunity to make more money