Which of the following best defines the term 'cottage industry' in economics?

• A. A large factory-based industry employing hundreds of workers
• B. A government-owned enterprise operating in rural areas
• C. A small-scale industry carried out at home by family members using their own equipment
• D. An industry that produces only agricultural goods

Answer: (C)

Verified step by step guidance

1. Understand that the term 'cottage industry' refers to a type of production or manufacturing setup in economics.
2. Recall that a cottage industry is typically characterized by small-scale production, often carried out in a home or small workshop rather than a large factory.
3. Recognize that cottage industries usually involve family members or a small group of workers using their own equipment, rather than relying on large machinery or factory settings.
4. Compare the given options to this definition: large factory-based industries and government-owned enterprises do not fit the small-scale, home-based nature of cottage industries.
5. Conclude that the best definition is 'A small-scale industry carried out at home by family members using their own equipment' because it matches the key characteristics of cottage industries.