The Division of Labour and Increasing Returns to Scale

James A. Brander

Working Papers from Queen's University, Department of Economics

Abstract: Under what circumstances would Adam Smith's statement "the division of labour is limited by the extent of the market" be valid. This paper shows the validity of Smith's law depends not on increasing returns to scale, but on the effect of scale on economies of scope (i.e. cost complementarities among productive activities)

Date: 1979

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Persistent link: http://EconPapers.repec.org/RePEc:qed:wpaper:365

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