Company A can produce 10 units of Product X or 5 units of Product Y in a day, while Company B can produce 8 units of Product X or 4 units of Product Y in the same time. If both companies specialize based on their comparative advantage, what should Company A produce to maximize overall production efficiency?

To maximize overall production efficiency, Company A should focus on producing Product X. This is because Company A can produce more units of Product X compared to Product Y, with a production capability of 10 units of Product X versus 5 units of Product Y. On the other hand, Company B, which has a lower production capacity for Product X at 8 units, can still produce 4 units of Product Y. By specializing, Company A can produce the most of what it is relatively better at, allowing both companies to trade and benefit from higher total production of both products. For example, if Company A produces only Product X, it can supply more units, which can then be traded with Company B for Product Y, leading to greater overall output for both companies.