A manufacturer of electric cargo bikes transitions from a craft production system—where each technician assembles an entire bike from start to finish—to a system based on the division of labour, breaking the assembly process into ten sequential, specialised tasks.
Which of the following best explains why this change is expected to increase labour productivity, alongside a major economic disadvantage of implementing this system?
Productivity increases because workers become highly versatile, enabling them to easily substitute for one another across any stage of production; the main disadvantage is that the firm must rely on a barter system to acquire components.
Productivity increases because the simplification of tasks allows the firm to eliminate capital inputs and rely solely on manual labour; the main disadvantage is that the lack of specialised machinery increases the long-run average cost of production.
Productivity increases because workers gain high task-specific dexterity and avoid the time lost in moving between different tools; the main disadvantage is that extreme task monotony can lead to worker alienation and higher staff turnover.
Productivity increases because specialising in a single task allows workers to bypass the law of diminishing returns in the short run; the main disadvantage is that the firm must divide its market geographically, which restricts overall sales volume.
