Trade

People, companies and contries trade between one another because trade benefits both parties!
There are many methods to determine if a specific trade is good for one of this economic agents.

Absolute Advantage

A producer has an absolute advantage over another if it can produce a higher total quantity than the other.

Comparative Advantage

A producer has a comparative advantage over another if it produces at a lower cost than the other

Specialization and Trade

Trade is what allows societies to benefit from specialization because you'll get your products made with higher efficiency, which translates to lower costs.

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