Qualification > Commerce

Economic Help!

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Jake:
What are The benefits of specialisation..?? rather than diversification??

Name:
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  :(

I Jimmy I:
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.

Name:
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?  ???

I Jimmy I:
AWWW...
Now Im confused :(

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