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Author Topic: Economic Help!  (Read 5122 times)

Offline Jake

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Economic Help!
« on: May 26, 2009, 04:45:42 pm »
Explain with examples what is meant by specialisation and diversification.[6]
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Offline I Jimmy I

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Re: Economic Help!
« Reply #1 on: May 26, 2009, 05:29:14 pm »
Errrmm, I can give simple explanations.
Specialisation is basically specialising into something.Meaning, a company specialises in the production of clothes , this means that the company's main focus will be on producing clothes and nothing else!!
This is done because the company may have a comparitive advantage such as reduced average costs per unit or any other reasonable explanation.

Diversification is quite the opposite.Meaning that this company will produce more than clothes to reduce the risk of having undemanded product because demand for clothes may fall and then the company will suffer greatly.

Anywayz this info is from my experience and no book. So im not 100% sure. Please check with other students.
Thank You
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Offline Name

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Re: Economic Help!
« Reply #2 on: May 26, 2009, 06:00:19 pm »
IJimmyI got it. its correct.
i love how you dont need to study to knw everything in economics  :P
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Offline I Jimmy I

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Re: Economic Help!
« Reply #3 on: May 26, 2009, 06:04:09 pm »
Thats why I like Eco and HATE Business St.
Eco. is simple, requires ur commonsense.
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Offline Name

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Re: Economic Help!
« Reply #4 on: May 26, 2009, 06:08:55 pm »
exactly
i never took business anyways but i would prefer eco to any other subject wether it be business or anything else  ;D
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Offline Jake

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Re: Economic Help!
« Reply #5 on: May 26, 2009, 06:14:44 pm »
What are The benefits of specialisation..?? rather than diversification??
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Offline Name

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Re: Economic Help!
« Reply #6 on: May 26, 2009, 06:26:12 pm »
Advantages of specialiasation:

- resources are not wasted
- increases output through technical economies of scale --> reduced average cost of production --> more profit
- can benefit from bulk purchases

thats all i can think of at the moment  :(
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Offline I Jimmy I

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Re: Economic Help!
« Reply #7 on: May 26, 2009, 06:26:21 pm »
ermmm, as I mentioned b4 it will have reduced average costs per unit.
Another advantage is that more goods and services will be produced since the repition of work will increase the experience of a worker and therefore production is increased.
Another thing is that time is saved. This is because in diversification, for producing a product it will have different stages such as producing a table,1st it will assembled then polished etc.
So in specialisation it saves time and avoids a good being transported from one person to another in order to finish the next stage. I think thats it. Can some1 plz post an answer to compare it, Thank You.
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Offline Name

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Re: Economic Help!
« Reply #8 on: May 26, 2009, 06:35:40 pm »
Diversification is relaying on another product. for example for marks and spencers, it used to specialise in clothes. NOW it has diversified because it now produces food products.

Advantages of Diversification:
- fall back on revenue if demand for product decreases (for M&S, if nobody wants to buy their clothes any more, at least they still got money from the selling of food products)
- ensures business does not close in case the market for ( eg for M&S: clothes) collapsed

"This is because in diversification, for producing a product it will have different stages such as producing a table,1st it will assembled then polished etc."

i think thats specialisation, where each worker does just one thing.right?  ???
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Offline I Jimmy I

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Re: Economic Help!
« Reply #9 on: May 26, 2009, 06:39:15 pm »
AWWW...
Now Im confused :(
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Offline I Jimmy I

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Re: Economic Help!
« Reply #10 on: May 26, 2009, 06:40:59 pm »
Ye, I think name is right cuz what I said is division of labour and that comes under Specialisation...
Lolz.. now i need to refer my notes :(
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Offline I Jimmy I

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Re: Economic Help!
« Reply #11 on: May 26, 2009, 06:42:55 pm »
1 MORE POST AND I WILL GET PROMOTED!!! :D
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Offline I Jimmy I

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Re: Economic Help!
« Reply #12 on: May 26, 2009, 06:44:10 pm »
WTH???? Im already promoted...
Didnt know that :P
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Offline Name

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Re: Economic Help!
« Reply #13 on: May 26, 2009, 07:18:19 pm »
lool

ye u created and cleared a big mess in my mind!

ok so what you said was specialisation right? not diversification?

CONGRATS ON GETTING PROMOTED!!
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Offline diva_doll

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Re: Economic Help!
« Reply #14 on: May 26, 2009, 07:55:08 pm »
wow..if onli u cud borrow brainz..lol
i totally suck at eco :(
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