What are the potential benefits of trade based on comparative advantage?

The concept of comparative advantage emphasizes that countries (or individuals) can gain from trade by specializing in the production of goods and services for which they have a lower opportunity cost, while trading for those that they produce less efficiently. When each trading partner specializes according to their comparative advantage, overall production increases beyond what each could achieve independently.

Therefore, increased output is a primary benefit of trade stemming from comparative advantage. By focusing on specific areas where they hold an advantage, countries can utilize their resources more effectively, leading to greater total production and a more efficient allocation of global resources. This not only boosts the economies involved but also enhances consumer welfare by making a wider variety of goods available at lower prices.

While the other options touch on important economic concepts, they do not capture the core essence of comparative advantage in the context of trade as effectively as increased output does. For instance, resource reallocation is certainly a factor of trade, but it is the resultant increased output that most directly stems from individuals or countries specializing according to their comparative advantages.