Answer to Question #259610 in Microeconomics for namaz

Question

What does the domestic price that prevails without international trade tell us about a nation’s comparative advantage?

Answer 1

Opportunity cost is brought 

about when talking about competitive advantage. If the opportunity cost is low, then opening up trade brings a competitive advantage. When the domestic price is higher than the foreign price, a nation has a higher opportunity cost of producing the goods, and there is no comparative advantage in producing the commodity to the domestic country.