COMPARATIVE ADVANTAGE

VS ABSOLUTE ADVANTAGE
Absolute advantage and comparative
advantage are two terms that are widely used
in international trade.

Both terms deal with production, goods and

services.
Comparative Advantage
Comparative advantage is a condition in
which a country produces particular goods at
a lower opportunity cost in comparison to
other countries.

Comparative advantage can be described as

the ability of a particular country to produce
a certain product better than another
country.
Absolute Advantage
Absolute advantage is a condition in which
a country can produce particular goods at a
lower cost in comparison to another country.

A country will have an absolute advantage

over another country when it produces the
highest number of goods after the same
resources are supplied to both of them.
Absolute advantage also means more goods
and services in an efficient way.
Difference
 Comprative Advantage Absolute Avantage

a condition in which the trade is mutually beneficial a condition where the trade is not mutually beneficial

looks into the overall production of the services or concerned with multiple goods
goods within a time frame

opportunity cost is the factor that is involved in cost is a factor involved in absolute advantage
comparative advantage