Overview

absolute advantage


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The ability to produce an output using fewer inputs than other producers. With only one type of resource, such as hours of work, a producer with lower inputs has an absolute advantage. When there are many factors of production absolute advantage means that the production set for one producer is everywhere outside that of another. Absolute advantage gives no guidance on what to do with resources, which are best employed where their comparative advantage is greatest.

Subjects: Economics — Marketing.


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