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Absolute Advantage


This is an economics concept in which one party has a direct advantage in efficiency in producing or providing a specific good or service over another party or competitor.

Understanding the Term

Absolute advantage is the ability of an individual, company, region, or country to produce a greater quantity of a good or service with the same quantity of inputs per unit of time, or to produce the same quantity of a good or service per unit of time using a lesser quantity of inputs, than its competitors.

It’s a concept that is widely used in economics.


Absolute advantage can be contrasted with comparative advantage, which is the ability to produce goods and services at a lower opportunity cost.

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