Absolute Advantage

A nation has an absolute advantage if (1) it’s the only source of a particular product or (2) it can make more of a product using the same amount of or fewer resources than other countries. Because of climate and soil conditions, for example, Brazil has an absolute advantage in coffee beans and France has an absolute advantage in wine production. Unless, however, an absolute advantage is based on some limited natural resource, it seldom lasts. That’s why there are few examples of absolute advantage in the world today. Even France’s dominance of worldwide wine production, for example, is being challenged by growing wine industries in Italy, Spain, and the United States.

Source:Business in a Global Environment from http://2012books.lardbucket.org