Quick Definition

Absolute advantage refers to the ability of a country, individual, or company to produce a good or service more efficiently than its competitors using fewer resources.

Examples

• 1A country like Saudi Arabia has an absolute advantage in oil production due to its abundant natural reserves.
• 2A software company might have an absolute advantage in developing AI tools if it has access to superior technology and expert personnel.
• 3A farmer in a tropical region has an absolute advantage in growing bananas compared to a farmer in a colder climate.

Tags