The ability of a producer to produce a higher absolute quantity of a good with the productive resource available.
The ability of an economic actor (an individual, a household or a firm) to produce some particular good or service with a smaller total input of economic resources (labor, capital, land, etc.) per unit of output than other economic actors. In analyzing the theory of trade and economic
specialization , it is important to distinguish absolute from
comparative advantage , since it is comparative advantage that determines the potential welfare gains from specialization and trade, and not absolute advantage. [See also:
comparative advantage ]
