Answer to Question #220322 in Macroeconomics for Nana K

Question

Critically examine the myths associated with the concept of comparative advantage.

Answer 1

Comparative advantage is a kind of economy that enables a company to sell goods and services at a lower price than its competitors and realize stronger sales margins. If for instance company A sells a trouser at $50 while company B sells the same trouser at $45, more buyers will opt to buy trousers from company B hence the company will end up making more profit than company A.