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The concept of comparative advantage explains how trade between two countries can make each better off.

The concept of comparative advantage suggests that countries will engage in trade with one another, exporting the goods that they have a relative advantage in.

Comparative advantage lead to gains from trade as countries and people have different costs of production, so they can take advantage of their differences in order to make themselves better off. Thus, when they do this, they experience gains from trade.

Hence, comparative advantage shows that trade can be beneficial to both trading partners and can make each better off.

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