IshaanBilala
Banned
Specialisation occurs when workers are assigned specific tasks within a production process. Workers will require less training to be an efficient worker. Therefore this will lead to an increase in labour productivity and firms will be able to benefit from economies of scale (lower average costs with increased output) and increased efficiency.
Specialisation can also mean that individual countries can produce certain goods that they are best at producing and then exchange them with other countries.
The theory of comparative advantage states countries should specialise in producing those goods where they have a lower opportunity cost (relatively best at producing)
Specialisation requires trade. Specialisation and trade means that countries that produce no oil can consume oil products and countries with large reserves of raw materials can export them in exchange for other goods that they need. This helps reduce the problem of scarcity in individual countries and enables countries PPF to shift outwards.
If there is increased trade there will also be increased competition. This means that domestic monopolies will now face competition from abroad therefore they have increased incentives to cut prices and be efficient.
Specialisation can also mean that individual countries can produce certain goods that they are best at producing and then exchange them with other countries.
The theory of comparative advantage states countries should specialise in producing those goods where they have a lower opportunity cost (relatively best at producing)
Specialisation requires trade. Specialisation and trade means that countries that produce no oil can consume oil products and countries with large reserves of raw materials can export them in exchange for other goods that they need. This helps reduce the problem of scarcity in individual countries and enables countries PPF to shift outwards.
If there is increased trade there will also be increased competition. This means that domestic monopolies will now face competition from abroad therefore they have increased incentives to cut prices and be efficient.