Division of Labour (Labour Markets)

The division of labour occurs where production is broken down into many separate tasks.

• The division of labour occurs where production is broken down into many separate tasks
• Division of labour can raise output per person as people become proficient through constant repetition of a task
• This is called “learning by doing”
• This gain in labour productivity helps to lower the supply cost per unit
• Reduced supply costs in theory will lead to lower prices for consumers of goods and services causing gains in economic welfare e.g. through an increase in consumer surplus