Absolute Advantage

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Definition

When a country has the capacity to produce goods at a lower cost than another country, it is said to have an absolute production advantage. Even if a country has an absolute advantage in the production of all goods, it can still gain from specialization and trade if it has a comparative advantage in the production of any good.[1]

References

  1. ^ American Marketing Association. Dictionary. <https://www.ama.org/resources/Pages/Dictionary.aspx> (cited 1 April 2015).

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