What is the difference between a comparative and a competitive advantage?

Comparative and competitive advantage are different terms that refer mainly to what informs about the decision that is worth choosing what can be produced on the competitive market. The chamber advantage occurs when a company or country can produce something for a relatively cheaper rate than a competition or other country. A competitive advantage is when the company appears as a leader in its market sector because of the ability to produce goods or provide services with higher profits than competitors and at lower costs for consumers.

In analyzing a comparative and competitive advantage, the involved entities must perform their strengths and weaknesses with regard to their benefits. In a comparative advantage, one entity could have the advantage of producing the product because of the fact that the raw material used for production is easily and cheaply available. An example is two countries that produce engine oil lubricants. The Earth Maybe placed in a country producing oil in the Middle East, while the Earth B sefound in Asia.

Using the above example, the country and a comparative advantage have a comparative advantage because it creates raw materials for the production of engine oil lubricants. Country B must import raw materials from country or other oil producing countries at considerable costs. This means that Earth B is quite disadvantaged in terms of engine oil lubricants compared to Earth A. For this purpose, Earth B may want to look for something else in which it has a comparative advantage.

Also, when assessing factors in a comparative and competitive advantage, the involved entities should decide whether it is better to produce or easier and cheaper to import the item. This is especially true for the situation in which the company has a comparative advantage in the production of professionaro. On the other hand, the competitive advantage focuses on the benefits of profit and the benefits of the price.

In the competitive advantage, the company has an advantage over other companies on competitiveThe market is able to offer similar or related customers products at a lower price than competitors. The second factor of a competitive advantage is if the company is also able to publish more profits than competitors, even if it sells goods at a reduced price. For example, if 15 companies in the geographical region produce sneakers, one who is able to sell its sneakers to consumers at a cheaper price than others and increasing profit has a competitive advantage. The main difference in the comparative and competitive advantage as such is that competitive benefits decide by higher profits and lower consumers, while comparative benefits decide from ease of production.