When a firm is able to create more economic value than rival firms it is said to have a(n)
A) comparative advantage.
B) competitive advantage.
C) residual advantage.
D) economic advantage.

Question

Quizplus · Accepted Answer

When a firm is able to create more economic value than rival firms, it is said to have a competitive advantage. In other words, it is able to produce goods or services at a lower cost or offer better quality than its competitors, which allows the firm to achieve higher profits and market share. A comparative advantage refers to a country's ability to produce goods or services at a lower opportunity cost than another country. A residual advantage and economic advantage are not commonly used terms in economics.

When a Firm Is Able to Create More Economic Value