Absolute advantage

Absolute advantage occurs when a company or country can produce more of a product using the same amount of resources or produce the same amount of a product using fewer resources than its competitors. In contrast, comparative advantage refers to the ability to produce a product at a lower opportunity cost than others.  Opportunity cost represents the potential benefits lost when choosing one option over another. While absolute advantage focuses on efficiency and productivity in using resources, comparative advantage centres on the cost advantage gained by producing goods more efficiently relative to other choices that an individual, investor, or business misses out on when choosing one alternative over another.