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Difficulty: EasyDivision of Labor and Specialization

A commercial bakery operating in a small community decides against dividing its production process into specialized sub-tasks because the local population buys only a small quantity of bread daily. Which factor is primarily responsible for limiting the practice of division of labor in this bakery?

  1. The extent of the marketAnswer
  2. B
    The law of diminishing returns
  3. C
    The localization of industries
  4. D
    The high cost of fixed inputs

Answer

The extent of the market primarily limits the practice of division of labor.
The extent of the market determines the volume of goods a firm can sell. If demand is limited, breaking down production into highly specialized repetitive tasks leads to underutilization of workers and operational inefficiency.

Step-by-Step Solution

1
Identify the primary constraint presented in the scenario.
The bakery faces low daily demand for its product from the local community.
Specialization requires continuous mass production to justify dividing labor into discrete, narrow tasks.
2
Relate the constraint to economic principles of production.
Division of labor is limited by the extent of the market.
When total market demand is small, workers assigned to narrow tasks would spend most of their time idle.

Key Concept

Division of labor is limited by the extent of the market.
Estimated Time:45s
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Topics

Division of Labor and Specialization

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