# Market Separation

# Market Separation

## Definition

The geographical or political isolation of markets from each other, preventing the free exchange of goods and limiting the potential for specialisation and division of labour. Market separation occurs when natural barriers, political boundaries, or poor infrastructure prevent trade between regions.

## Source Chapter

Book I, Chapter 3

## Context

Smith explains that inland parts of the country can for a long time have no other market for the greater part of their goods than the country which lies round about them, separating them from the sea-coast and great navigable rivers, thus limiting their economic development.

## Economic Domain

Exchange

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