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Is It Possible for a Firm to Have an Absolute

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Essay

Is it possible for a firm to have an absolute advantage in producing something without having a comparative advantage? Why or why not?


Definitions:

Average Variable Cost

The total variable cost divided by the quantity of output produced; it represents the variable cost per unit of output.

Marginal Revenue

The additional income earned from selling one more unit of a good or service, a key factor in decision-making for producing additional units.

Marginal Revenue

The extra revenue earned by selling an additional unit of a product or service.

Price-taker Model

An economic model describing a company or entity that must accept the prevailing prices in the market of its products because it does not have the market power to change them.

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