The Theory of Comparative Advantage begins by assuming that a given firm first becomes established in its home country and may subsequently penetrate foreign markets via geographic or product differentiation.

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The Theory of Comparative Advantage, developed by David Ricardo, is an economic theory that explains how countries can benefit from specializing in producing goods where they have a lower opportunity cost, not about how firms establish themselves or penetrate markets.

The Theory of Comparative Advantage Begins by Assuming That a Given