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# Market Size Specialization

# Definition

The economic principle that larger markets enable greater specialization and division of labour by providing sufficient demand to support more complex manufacturing processes. This relationship determines the extent of economic development possible in any society and explains why towns with larger populations support more advanced manufacturing.

## Source Chapter

Book III, Chapter 1

## Context

Smith presents this as a key factor in economic development, demonstrating how market size directly influences the division of labour and productivity improvements that characterize advanced commercial societies.

## Economic Domain

Exchange

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