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Comparative Advantage
The unique benefits or strengths of a product compared to competitors, which are emphasized in marketing and sales efforts.
Implications
An economic principle that explains how a country, company, or individual can produce goods or services at a lower opportunity cost than others, leading to specialization and trade benefits.
Example
Example: A country with a comparative advantage in textile production focuses on manufacturing and exporting textiles while importing goods where other countries have a comparative advantage.
Related Terms
Different from absolute advantage, which refers to the ability to produce more of a good using the same resources, comparative advantage is about lower opportunity costs.
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