The term "comparative advantage" is a key concept in economics and international trade. It describes the ability of a nation to produce goods or services more efficiently and cost-effectively than other countries. This advantage allows countries to specialise in the production of goods or services where they have a competitive advantage and sell them on the global market.

Essentially, comparative advantage means that even if a country is less efficient in all areas than another country, it can still benefit from specialisation and trade. This is because the opportunity costs associated with producing a particular good are different for each country. A country should focus on producing what its opportunity costs are lowest for and source the other goods from countries that have a comparative advantage in these areas.

The comparative advantage can be achieved in various ways. It can be based on natural resources, technological superiority, skilled labour or other factors. For example, one country has abundant natural resources such as oil or minerals, while another country has highly qualified engineers and skilled labour. Both countries can utilise their comparative advantage by exchanging resources and benefiting from each other.

In international trade, comparative advantage leads to a more efficient allocation of resources and an increase in prosperity. Countries can concentrate on the production of goods or services in which they are strong and at the same time benefit from the products of other countries. This leads to a wider variety of available goods and lower prices for consumers.

To summarise, comparative advantage is a fundamental concept that forms the basis for international trade and economic cooperation. It shows how countries can benefit from each other through specialisation and trade, which ultimately leads to an increase in prosperity on a global level.