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: 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. If your company specializes in one particular product, you might be priced out of the market with no way to diversify quickly. If people no longer need your product (think gas lamps), those companies can’t sustain themselves without quickly shifting focus elsewhere. And for many, changing focus is not possible, and they are not able to continue on. Complacency
When thinking about complacency, think about the individual employee whose job becomes overly routine. Remember our example above about the assembly line worker, whose sole job is to twist a few screws for hours on end.