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top   »  strategy   »  business strategy   »  competitive advantage   »  competition   »  absolute advantage

What is Absolute Advantage?

 , November 16, 2015 updated on October 16, 2016
Absolute advantage is an ability to produce more than your competitors with the same amount of resources such as labor. This generally translates to a lower cost and often leads to market dominance.
Overview: Absolute Advantage
AreaEconomics
DefinitionAn ability to produce more with the same amount of inputs.
ExamplesThe region that produces the most oranges per acre of land.
The automotive manufacturer that produces the most cars per worker.
The bank that achieves the best return on capital.
The technology company that produces the most valuable intellectual property for each unit of research & development spend.
Related ConceptsCompetitive Advantage
Economies Of Scale

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A list of economic theories that are particularly useful for business.

Adverse Selection

The tendency for people at high risk to buy insurance.

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A list of economic positions or capabilities that allow you to outperform in a particular industry.

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A definition of knowledge work with examples.

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A definition of production with examples.

Post Scarcity

An overview of post-scarcity.

Economic Infrastructure

The common types of economic infrastructure.

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The common types of inefficiency.

Supply Examples

An overview of supply with common examples.

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The difference between two common investment measurements.

Regression Toward The Mean

An overview of Regression Toward The Mean.

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An overview of the Efficient Market Hypothesis.

Animal Spirits

An overview of animal spirits, a theory of investing.

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