Absolute Advantage

absolute advantage

from necteo.com

Definition

When a country has the capacity to produce goods at a lower cost than another country, it is said to have an absolute production advantage.

Even if a country has an absolute advantage in the production of all goods, it can still gain from specialization and trade if it has a comparative advantage in the production of any good.

 

References

  1. American Marketing Association, AMA Dictionary.

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