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Absolute Advantage

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absolute advantage
total advantage, ability of one company to produce a good at lower costs than any other business in the same industry (Economics)

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Absolute advantage
In economics, the principle of absolute advantage refers to the ability of a party (an individual, or firm, or country) to produce a greater quantity of a good, product, or service than competitors, using the same amount of resources. Adam Smith first described the principle of absolute advantage in the context of international trade, using labor as the only input. Since absolute advantage is determined by a simple comparison of labor productiveness, it is possible for a party to have no absolute advantage in anything; in that case, according to the theory of absolute advantage, no trade will occur with the other party. It can be contrasted with the concept of comparative advantage which refers to the ability to produce specific goods at a lower opportunity cost.

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Political Economy Terms Dictionary

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Absolute advantage
The ability of an economic actor (an individual, a household or a firm) to produce some particular good or service with a smaller total input of economic resources (labor, capital, land, etc.) per unit of output than other economic actors. In analyzing the theory of trade and economic specialization , it is important to distinguish absolute from comparative advantage , since it is comparative advantage that determines the potential welfare gains from specialization and trade, and not absolute advantage. [See also: comparative advantage ]

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Absolute advantage
Absolute advantage
  • (Econ) Lợi thế tuyệt đối.
      + Xem Comparative Advantage.

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Dizionario inglese-italiano 1.0.012

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