Which of the following is an example of a market related to comparative advantage?

The example of comparative advantage is illustrated by a country that produces cars more efficiently than another. Comparative advantage refers to the ability of an entity, whether a country, company, or individual, to produce a particular good or service at a lower opportunity cost than others. This principle encourages specialization and trade among entities, as each focuses on what it does best while trading for other goods that it does not produce as efficiently.

In this scenario, the country that can produce cars more efficiently exemplifies its comparative advantage in car manufacturing. By engaging in trade, this country can benefit from its efficiency while allowing others to specialize in different products where they have a comparative advantage. Thus, trade occurs when entities maximize their strengths, ultimately leading to enhanced productivity and economic welfare for all involved.