AI-generated practice question — model-generated for extra practice, not a previous-year CBSE board question.
Merchants in seventeenth-century European towns could not expand production because urban craft guilds were powerful. These guilds controlled production, regulated prices, restricted entry of new traders, and held monopoly rights granted by rulers. It was therefore impossible for new merchants to set up business freely in towns.
To solve this problem, merchants moved to the countryside, where there were no guild restrictions. Poor peasants and artisans, who had lost access to common lands, eagerly agreed to work for merchants in exchange for advances. This system—known as proto-industrialisation—allowed production to expand without factories.
Source: The Age of Industrialisation, Section 1 (Before the Industrial Revolution)
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