Why is the development of markets critical in the context of division of labor? 1.Unless a market develops for the exchange of the surplus of goods and services that are produced by virtue of division of labor would not be realized. 2.As the level of output increases because of division of labor, enabling further advantages in economies of scale, which results in the reduction of the average cost per unit of the produced and exchanged good, would not be realized. 3.Division of labor leads to specialization thus increasing productivity. Specialization in turn leads to inventions that increase productivity and thus output. If there were no markets for the goods and services that is produced neither specialization, nor inventions. 4.All the of the above are correct.
Why is the development of markets critical in the context of division of labor?
1.Unless a market develops for the exchange of the surplus of goods and services that are produced by virtue of division of labor would not be realized.
2.As the level of output increases because of division of labor, enabling further advantages in economies of scale, which results in the reduction of the average cost per unit of the produced and exchanged good, would not be realized.
3.Division of labor leads to specialization thus increasing productivity. Specialization in turn leads to inventions that increase productivity and thus output. If there were no markets for the goods and services that is produced neither specialization, nor inventions.
4.All the of the above are correct.
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