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WAEC Economics 1993 Question 20

Question 20

Theory of Production

Division of labour may be restricted when

  1. A.an ailing economy has improved
  2. B.producers live in villages
  3. C.market is small
  4. D.there is full employment
  5. E.there is inflation.
Show the answer and explanation

Answer: C (market is small)

Explanation

Division of labour is limited by the size of the market: a small market cannot absorb large output.