absolute advantage


The name for the ability of one entity to engage in more efficient production than another entity. Assuming equal inputs, the entity with an absolute advantage will have a greater output.

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Microsoft had an absolute advantage over the small technology firm because it had cheaper sources of labor and raw materials.

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An individual working with two displays connected to his computer terminal has an absolute advantage over an individual with just one due to increased potential productivity.

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My father owned a bar that was next door to a factory, and he got more customers to come to his bar over the one further down the street because he had an absolute advantage in location.

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absentee owner comparative advantage