Comparative advantage is an economy’s ability to produce a particular good or service at a lower opportunity cost than its trading partners.

(“What Is Comparative Advantage?” n.d.)

In an economic model, agents have a comparative advantage over others in producing a particular good if they can produce that good at a lower relative opportunity cost or Autarky price, i.e. at a lower relative marginal cost prior to trade. Comparative advantage describes the economic reality of the work gains from trade for individuals, firms, or nations, which arise from differences in their factor endowments or technological progress. (The absolute advantage, comparing output per time (labor efficiency) or per quantity of input material (monetary efficiency), is generally considered more intuitive, but less accurate — as long as the opportunity costs of producing goods across countries vary, productive trade is possible.)

(“Comparative Advantage” 2022)


“Comparative Advantage.” 2022. Wikipedia, August.
“What Is Comparative Advantage?” n.d. Investopedia. Accessed October 28, 2022.