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Is beyond the firm's capabilities to produce domestically but could be achieved by trading with another country?

Sagot :

Absolute advantage is beyond the firm's capabilities to produce domestically, but could be achieved by trading with another country.

What is Absolute advantage?

Adam Smith, an economist from the 18th century, introduced the idea of absolute advantage in his book The Wealth of Nations to explain how nations might profit from trade by specializing in producing and exporting the things that they can manufacture more successfully than other nations.

International trade is the trade where countries import and export the goods to the other countries so that all the countries have some resources.

Thus, it is absolute advantage.

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