Question

Worker specialization is one benefit of what concept?

Answer 1

Answer: economics of scale

Specialization is a process of doing a particular work by a worker, rather doing multiple works – such as a worker is specialized in fabrication work but not in stitching work; it should allow that worker to do only fabrication but not stitching.

If this continues, the person specialized in particular field should give growth in that field in the long-run; it helps to implement “economics of scale”—it means getting the cost advantage (reduction in per-unit cost) with the increasing volume of production.

Example: Suppose fixed cost is $4,000; if the volume of production increases from 1,000 to 2,000 units, per-unit cost reduces from ($4,000 / 1,000 =) $4 to ($4,000 / 2,000 =) $2.