A factory in Vietnam can produce more shoes than other
countries situation best illustrates the concept of absolute advantage
The capacity of a person, a business, or a nation to generate more product than its rivals while using the same inputs is known as absolute advantage. It indicates that a firm with a distinct edge is more productive than its competitors in manufacturing a certain good. It produces goods at considerably lower prices than competitors because it uses lower-marginal-cost inputs (materials and labor).
Due to its ability to create shoes cheaper than competing factories, a factory in Vietnam has a distinct edge. The factory is more competitive than its rivals in the market thanks to absolute advantage.
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