An artisanal furniture craftsman in an urban center specializes in producing custom-carved mahogany executive desks tailored to individual client specifications. Despite the market dominance of a nearby mass-production factory offering lower unit prices, the craftsman continues to operate profitably. Which of the following factors primarily accounts for the continued survival of this small-scale enterprise?
- The high consumer demand for personal attention and customized product design that mass producers cannot efficiently provideAnswer
- BThe continuous enjoyment of external economies of scale that reduce individual raw material costs
- CThe total elimination of worker monotony achieved through extensive division of labour in the workshop
- DThe generation of interest as a direct factor reward for owning the physical workshop premises
Answer
The high consumer demand for personal attention and customized product design that mass producers cannot efficiently provide.
Small-scale businesses maintain a strong competitive advantage in markets where products require personal craftsmanship, direct interaction with buyers, and custom specifications. Large mass-production factories specialize in standard uniform goods and cannot offer individual customization efficiently.
Step-by-Step Solution
Key Concept
Factors responsible for the survival of small-scale production alongside large-scale production