This table shows the production possibility schedule for several major manufacturing companies in the automobile industry. Manufacturing CompanyTruck Parts Car PartsCompany A10 per hr.20 per hr.Company B10 per hr.25 per hr.Company C15 per hr.15 per hr.Company D20 per hr.25 per hr. Which manufacturing company has the comparative advantage for car parts?

Comparative advantage in car parts goes to the company with the lowest opportunity cost of producing them. Compare truck parts given up per car part: Company A gives up 10/20 = 0.5, Company B gives up 10/25 = 0.4, Company C gives up 15/15 = 1, and Company D gives up 20/25 = 0.8. Company B gives up the fewest truck parts per car part, so it has the comparative advantage.

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