Question 5
Theory of ProductionWhich of the following is an important limiting factor in the application of division of labour?
- A.Market size
- B.Availability of infrastructure
- C.Wage rate
- D.Raw materials
- E.Availability of land
Show the answer and explanation
Answer: A (Market size)
Explanation
Division of labour leads to mass production, which is only worthwhile if the market is large enough to buy the output.