Question

What is the difference between absolute advantage and comparative​ advantage?

Answer 1

Answer and explanation:

Absolute Advantage is an individual, company, or country's ability to produce a good or service at a lower cost than any competitor. To offset its competitor costs and earn higher profits, an organization with an absolute advantage requires fewer inputs or more productive processes.

Comparative advantage is an individual, firm, or country's ability 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 absolutely better at producing that good or service than another. It means it sacrifices less.

Answer 2

The Absolute Advantage is the indwelt ability of a country to produce specific goods in an efficient and effective manner at a relatively lower marginal cost.

While

Comparative Advantage refers to the country's capability of producing the specific good at lower marginal cost and opportunity cost.