An important principle for firms desiring to export is:

• A. Focus on products with the lowest domestic demand.
• B. Export only goods that are produced using the most expensive resources.
• C. Export goods for which they have the highest absolute production.
• D. Specialize in goods for which they have a comparative advantage.

Answer: (D)

Verified step by step guidance

1. Understand the concept of comparative advantage: It means a firm or country should specialize in producing goods for which it has the lowest opportunity cost compared to others.
2. Recognize that absolute production or using the most expensive resources does not determine export success; rather, it's about efficiency relative to alternatives.
3. Identify that focusing on products with the lowest domestic demand is not necessarily beneficial for exports, as demand abroad matters more.
4. Recall the principle that firms (or countries) should specialize in goods where they have a comparative advantage to maximize gains from trade.
5. Conclude that the correct export strategy is to specialize in goods for which the firm has a comparative advantage, enabling more efficient production and better trade outcomes.