Title: What Is Specialization in Economics? - Online Schools Report
Headings: What Is Specialization in Economics?
What Is Specialization in Economics?
About the Author
Emma Keegan
Types of Economic Specialization
Macroeconomics
Microeconomics
Impact of Specialization
Benefits
Increased Output
Absolute Advantage
Competition and Lower Prices
Disadvantages
Loss in Demand
Complacency
Political Vulnerability

Content: These specialized companies are able to create a higher quantity of better products because they are able to focus all their energy on that product or service. Absolute Advantage
This phrase is used to describe when a company produces more of a good or service at the same or lower cost than their competitor. While a company may have the resources to create all parts of a particular product, it would benefit then more by specializing in one particular aspect of the product. Absolute advantage is quite similar to comparative advantage, which factors efficiency into the mix. Companies save time and money when specializing. Competition and Lower Prices
As companies specialize in one product or component, they can reduce the cost of production while at the same time producing more products than ever. They will pass the savings off to you by offering their product at a lower cost. Likewise, as companies specialize, other companies will be created to provide the goods or service that is missing on the market and fill in any gaps. Disadvantages
Loss in Demand
A downside to economic specialization is how quickly the market can turn. New companies and innovative products are popping up daily.