Re:Self-owning corporations are legally possible
by nabla9 on Thursday February 22, 2018 @05:26PM
(#16442091)
"comparative advantage" is probably the most important simple concept in economics that is not self evident and intuitive. It was first discovered by Ricardo 200 years ago.
Comparative advantage comes from the ability to produce goods or services at a lower opportunity cost (you should also know what "opportunity cost" means to fully grasp the idea).
In the original formulation it means is that can be beneficial for two entities to trade even when one entity can produce all products cheaper than the other (it has an absolute advantage in all categories) if there is differences in the relative cost they produce those products themselves.
Comparative advantage comes from the ability to produce goods or services at a lower opportunity cost (you should also know what "opportunity cost" means to fully grasp the idea).
In the original formulation it means is that can be beneficial for two entities to trade even when one entity can produce all products cheaper than the other (it has an absolute advantage in all categories) if there is differences in the relative cost they produce those products themselves.
https://en.wikipedia.org/wiki/Comparative_advantage