Question

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.

Answer 1

A firm with a greater ability to create economic value than its competitors is said to have a competitive advantage, not comparative, residual, or economic advantage.

Step-by-step explanation:

When a firm is able to create more economic value than rival firms, it is said to have a competitive advantage. A competitive advantage indicates the firm's ability to perform in a manner that allows for the generation of higher sales or margins, and/or the retention of more customers than its competition. It differs from comparative advantage, which refers to the ability of a firm or country to produce a good or service at a lower opportunity cost than others.