Comparative advantage is an economic principle that explains how individuals or countries can benefit from specializing in the production of goods or services they can produce more efficiently than others. This means that even if one party is better at producing everything, they should focus on what they do best and trade for the rest, maximizing overall efficiency and output. For example, if Country A can produce cars more efficiently than Country B, while Country B is better at producing textiles, both countries can gain by specializing and trading. This allows each to enjoy a greater variety of goods at lower costs.