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Comparative Advantage and Competitive Advantage

Can the difference between comparative advantage and competitive advantage be discussed with the reference to the beer pricing say of Heineken of the Netherlands and Corona of New Mexico as they sell at home popular prices much as Budweiser and Miller do in the United States.

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Comparative advantage is the ability to produce a good at a lower cost, relative to other goods, compared to another country. With perfect competition and undistorted markets, countries tend to export goods in which they have a Comparative Advantage. www.wcit.org/tradeis/glossary.htm. A nation has a comparative advantage in the production of those goods that (compared to other goods and countries in the world) it produces less inefficiently than other commodities. A country will have a comparative advantage in one or more commodities, whether or not it has absolute advantages. highered.mcgraw-hill.com/sites/0072487488/student_view0/glossary.html

In other words, comparative advantage is the inherent qualities of a country that make it more competitive. In the U.S., it has been its large land mass, accessible oil, and financial sophistication that have allowed it to ...

Solution Summary

This solution discusses the difference between comparative advantage and competitive advantage with the reference to the beer pricing of Heineken of the Netherlands and Corona of New Mexico.

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