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Finance Dictionary and Glossary of Investment Terms
Comparative Advantage
Definition 1.
A situation where a country, individual, company, or region can produce a good at a lower opportunity cost than that of a competitor.
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Definition 2.
The name for the ability of one business entity to engage in production at a lower opportunity cost than another entity. Comparative advantage, rather than absolute advantage, is useful in determining what should be produced and what should be acquired though trade.
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