Next video:
Loading the player...

Comparative advantage is the ability of an individual, company or country to produce a good or service at a lower opportunity cost than its competitor. Having a comparative advantage doesn’t mean that one entity is better than another at producing a good or service. It means that it sacrifices less to do so.

  1. No results found.
Related Articles
  1. Insights

    Basic Concept Of Absolute Advantage

    Absolute advantage is the ability of an individual, country or company to produce a good or service at a lower cost than any competitor. An entity with an absolute advantage requires fewer inputs ...
  2. Investing

    What's a Competitive Advantage?

    A competitive advantage is an advantage a firm has over its competitors.
  3. Insights

    Competitive Advantage Counts

    What's the best indicator of a company's future success? Its ability to succeed when others fail.
  4. Insights

    What Is International Trade?

    Everyone's talking about globalization, so we explain what is it and why some oppose it.
  5. Small Business

    3 Secrets Of Successful Companies

    Make smart investments by spotting up-and-coming success stories early.
  6. Investing

    What Is The Difference Between Comparative Advantage And Absolute Advantage?

    When a nation can make a product at a higher quality and faster rate than another, it has an absolute advantage.
  7. Financial Advisor

    Which Economy Is Larger - The United States or China?

    China's economy may be larger than the U.S. economy, but it all depends on which exchange rate method you use to make the GDP comparisons.
  8. Investing

    Explaining Debt Service

    Debt service is a measure of a person or entity’s use of cash to pay interest and principal on debt obligations.
Hot Definitions
  1. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  2. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  3. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  4. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  5. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  6. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
Trading Center