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Modern international trade is based on the principle of

Modern international trade is based on the principle of

A.

Absolute cost advantage

B.

Comparative advantage

C.

Terms of trade

D.

Balance of trade

Correct answer is B

Comparative advantage is an economic term that refers to an economy's ability to produce goods and services at a lower opportunity cost than that of trade partners. A comparative advantage gives a company the ability to sell goods and services at a lower price than its competitors and realize stronger sales margins.