In this video, we discuss key differences between Absolute Advantage and Comparative Advantage.
Absolute Advantage is the ability with which an increased number of goods and services can be produced and that too at better quality as compared to competitors whereas Comparative Advantage signifies the ability to manufacture goods or services at a relatively lower opportunity cost.
๐๐๐ฒ ๐๐ข๐๐๐๐ซ๐๐ง๐๐๐ฌ ๐๐๐ญ๐ฐ๐๐๐ง ๐๐๐ฌ๐จ๐ฅ๐ฎ๐ญ๐ ๐๐๐ฏ๐๐ง๐ญ๐๐ ๐ ๐ฏ๐ฌ ๐๐จ๐ฆ๐ฉ๐๐ซ๐๐ญ๐ข๐ฏ๐ ๐๐๐ฏ๐๐ง๐ญ๐๐ ๐
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#1 โ Comparative advantage is reciprocal and mutual. Whereas, absolute advantage is not.
#2 โ Cost is a factor in deciding whether the country has an absolute advantage. Whereas, the opportunity cost is a factor deciding whether the country has a comparative advantage
#3 โ In absolute advantages, there is no mutual benefit in trade. Whereas trade is mutually benefitted in comparative advantage.
To know more about the ๐๐๐ฌ๐จ๐ฅ๐ฎ๐ญ๐ ๐๐๐ฏ๐๐ง๐ญ๐๐ ๐ ๐ฏ๐ฌ ๐๐จ๐ฆ๐ฉ๐๐ซ๐๐ญ๐ข๐ฏ๐ ๐๐๐ฏ๐๐ง๐ญ๐๐ ๐, you can go to this ๐ฅ๐ข๐ง๐ค ๐ก๐๐ซ๐:- https://www.wallstreetmojo.com/absolute-advantage-vs-comparative-advantage/
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