Principles of Microeconomics / Unit 1 MIC 0005 short lesson, about 20 seconds
Three Reasons Specialization Raises Output
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The idea
Specialization raises output for three reasons: workers do what suits them best, they improve with practice, and larger scale lowers the average cost of each unit.
In practice
A plant building fifty thousand cars a year spends less per car than one building a hundred.
Where people slip
The first reason previews comparative advantage; the third is called economies of scale and returns in unit six.
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