If tastes are identical between countries, then comparative advantage is determined by ?
Correct answer: A. supply condition only
- A. supply condition only
- B. demand conditions only
- C. supply and demand conditions
- D. can't tell without more information
Explanation
With identical tastes, demand patterns are the same, so comparative advantage comes from relative production conditions, including technology and factor supplies. These are supply-side conditions, making option a the best answer.
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