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: No. If the pencil manufacturer had to make each individual part, they would be putting out way fewer pencils. That is why specialization is important. It means a company can stick to making one part of a product effectively and efficiently, and they are able to increase the amount of goods they make annually. The overall supply chain becomes smoother, and the prices of goods go down. 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.