The woollen and worsted industry consists almost wholly of small firms which for the main part are none‐the‐less of a sufficient size to be economic production units—that is they are large enough to be able to employ sufficiently skilled production and technical management and to be able to produce yarn or fabric at an economic cost, providing the diversity of their product is not too great. Once diversity and variety is allowed to become too great, production costs start to rise rapidly as short runs inevitably affect the level of efficiency. This drop in efficiency can to some extent be reduced by raising the level of skill of production management, but this more skilled and more complex management is naturally more expensive, so both factors tend to increase cost.