what are the characteristics of cottage industy
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1) It is mostly carried out on a small scale.
2)It is carried out in the people's homes or in the fields.
3)Simple manufacturing tools are used.
4)The work is performed by manual techniques.
2)It is carried out in the people's homes or in the fields.
3)Simple manufacturing tools are used.
4)The work is performed by manual techniques.
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A cottage industry is a small-scale industry often operated out of a home, rather than out of a factory. Cottage industries are defined by the amount of investment required to start, as well as the number of people employed. They often focus on the production of labor-intensive goods.Cottage industries play a significant role in the economies of developing countries. These economies may lack the capital and financial systems to support larger industries. It may be difficult for smaller firms to grow due to a lack of available capital, or because of uncertainty relating to private property and legal rights.
Developing countries are also more likely to have a comparative advantage in the use of labor compared to the use of capital, allowing them to produce labor-intensive goods more cheaply than developed countries. Because cottage industries may employ labor methods that are heavily reliant on traditional tools and machinery or which require the use of hands, they are more likely to see lower productivity. Thus, even though they may employ a large portion of the population they may not produce a proportional amount of output.
Small-scale cottage industries are also an important source of employment, especially in rural areas. For farmers, operating a cottage industry out of the home can supplement the income raised from selling crops. For small villages, a cottage industry can allow local residents to come together to produce crafts for sale in local markets, or even for export to larger cities and other countries.
While companies operating in cottage industries may remain small, they still have to compete with other firms, whether other cottage industries or larger-scale companies. This requires them to employ new technologies that will improve efficiency and productivity. They will also have to compete for sources of labor, which can be especially difficult as a country becomes more developed and wages rise
Developing countries are also more likely to have a comparative advantage in the use of labor compared to the use of capital, allowing them to produce labor-intensive goods more cheaply than developed countries. Because cottage industries may employ labor methods that are heavily reliant on traditional tools and machinery or which require the use of hands, they are more likely to see lower productivity. Thus, even though they may employ a large portion of the population they may not produce a proportional amount of output.
Small-scale cottage industries are also an important source of employment, especially in rural areas. For farmers, operating a cottage industry out of the home can supplement the income raised from selling crops. For small villages, a cottage industry can allow local residents to come together to produce crafts for sale in local markets, or even for export to larger cities and other countries.
While companies operating in cottage industries may remain small, they still have to compete with other firms, whether other cottage industries or larger-scale companies. This requires them to employ new technologies that will improve efficiency and productivity. They will also have to compete for sources of labor, which can be especially difficult as a country becomes more developed and wages rise
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