Question

What can a producer gain by specializing?

sales
new customers
absolute advantage
opportunity costs

Answer 1

Short answer: more sales and new customers — and, more fundamentally, greater efficiency through comparative advantage (which lowers your opportunity cost).

Explanation:
- Specializing typically increases productivity, which can lead to higher sales and attract new customers.
- In economic terms specialization exploits comparative advantage (you produce what you give up least), thereby lowering opportunity costs and enabling gains from trade.
- It can sometimes produce an absolute advantage (being able to make more with the same resources), but the key concept is comparative advantage, not simply “gaining opportunity costs” (opportunity cost is what you forgo, not something you gain).