Question

In the previous example, Duke's and Beverage King were
efficient when they specialized.

Duke's chose to specialize in the production of tea because it is
at it.

Duke's and Beverage King can
when they specialize.

Answer 1

Duke's chose to specialize in the production of tea because it is better at it (has a comparative advantage).

Duke's and Beverage King can both gain from trade when they specialize — producing more overall and trading so each can consume more than they could alone.