Absolute advantage is the ability of an individual, company, region or country to produce a good or service at a lower cost per unit than another entity that produces the same good or service.

An entity with an absolute advantage can produce a product or service using a smaller number of inputs or a more efficient process than another entity producing the same good or service.

For example, if Country A needs 10 hours of labor in order to produce Product 1 while Country B needs 20 hours of labor in order to produce Product 1,

Country A has an Absolute Advantage in producing Product 1, since It needs less hours of labor in order to produce Product 1.