Question

When one nation can produce a product at lower cost relative to another nation, it is said to have a(n) __________________ in producing that product.a. relative advantageb. absolute advantagec. economy of scaled. production efficiency

Answer 1

Answer:

absolute advantage

Explanation:

An absolute advantage is the ability of a company, country, business, or individual to produce similar quantities of goods or services using fewer inputs. A producer with an absolute advantage can manufacture a product using a lower cost, or more efficiently than competitors. It means they can avail the product to the market at a lower price than any other company or country.

Absolute advantage is the basis for international or regional trade.  A firm or a country will specialize in producing products they can manufacture at a lower price and export them. Processing at a lower cost or efficiently gives a firm or country a big advantage in the market. Businesses prosper because they maximum in areas they have an absolute advantage.