Absolute Advantage

Absolute Advantage is a concept in economics that describes the ability of a country, individual, company, or region to produce a good or service at a lower cost than any other entity. For example, a country that has a lot of fertile land and a favourable climate for agriculture might have an absolute advantage in producing agricultural products.

The formula for Absolute Advantage is Cost per Unit of Production = Total Cost/Quantity of Output. This formula can be used to compare different entities' production costs to determine which has the lowest.