The principle of comparative advantage indicates that mutually beneficial international trade can take place only when

A) tariffs are eliminated.
B) transportation costs are almost zero.
C) relative costs of production differ between nations.
D) a country can produce more of some product than other nations can.

The principle of comparative advantage suggests that even if one country is less efficient in producing all goods compared to another country, there can still be a basis for mutually beneficial trade if they specialize according to their relative efficiencies. This is based on differences in relative production costs, not on absolute advantages or the absence of tariffs and transportation costs.