Question

A producer with a comparative advantage has the ability to produce a good or service at ________.a. a lower opportunity cost than any competitor can.b. a faster rate than any competitor can.c. a greater volume than any competitor can.d. a lower cost than any competitor can.

Answer 1

Answer:

The correct answer is option a.

Explanation:

Comparative advantage refers to the situation when an individual, firm or nation, can produce a good or service at a relatively lower opportunity cost than its competitors.  

A producer that can produce a good at a lower opportunity cost is said to be specializing in the production of that good.  

If a producer can produce a good at a relatively lower cost than any competitor, it implies that the producer has an absolute advantage in the production of that good.