Question

Which company has the comparative advantage in cost per pound of coffee? Café con Leche Beans Brothers Colombian Co. Turkish Coffee Company.

Answer 1

The company that has a comparative advantage in the production of coffee is Turkish coffee company.

What is comparative advantage?

Comparative advantage is when a company, individual or nation produces a good or service at a lower opportunity cost when compared to other companies, individuals or nations.

Opportunity cost is the cost of the resources forgone when one alternative is chosen to be produced over other options.

Here is the complete question:

Carmen wants to open her own coffee shop. She has narrowed down a list of wholesale retailers and their cost

per pound of coffee beans,

Whole Sale Company

Cost per lb.

Café con Leche

$8.50

Beans Brothers

$7.50

Colombian Co.

$11.25

Turkish Coffee Company

$6.25

Which company has the comparative advantage in cost per pound of coffee?

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Answer 2

The company with comparative advantage in cost per pound of coffee is the Turkish coffee shop.

What is comparative advantage?

A comparative advantage refers to an advantage possessed by a firm who spend lesser than it's rivals on production.

Here, the Turkish coffee shop offers a lower price per pound of coffee than it's competitors, this shows that its has a greater comparative advantage than its rivals.

Hence, the company with comparative advantage in cost per pound of coffee is the Turkish coffee shop.

Therefore, the Option D is correct.

Missing word "per pound of coffee beans, Whole Sale Company Cost per lb. Café con Leche $8.50, Beans Brothers $7.50, Colombian Co. $11.25, Turkish Coffee Company $6.25"

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