Absolute Advantage

What Does Absolute Advantage Mean?
The ability of a country, individual, company or region to produce a good or service at a lower cost per unit than the cost at which any other entity produces that good or service.

Investopedia explains Absolute Advantage
Entities with absolute advantages can produce something using a smaller number of inputs than another party producing the same product. As such, absolute advantage can reduce costs and boost profits.

Related Terms

Comparative Advantage
Competitive Advantage
Core Competency
Eating Someone's Lunch
Eclectic Paradigm
Free Trade Area
Narrow Moat
Productivity
Soft Economic Moat
Specialization
More Related Terms

Related Links

Economics Basics: Production Possibility Frontier, Growth, Opportunity Cost and Trade - See how the actions of individuals and companies affect society.
What is comparative advantage?

Get a new investing term in your inbox each day!

- join our Term of the Day!