Assertion(A): In the 18th century, European merchants found it difficult to expand production within towns.

Reason(R): Towns had a guild system which restricted the entry of new people into the trade.

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Both (A) and (R) are true and (R) is the correct explanation of (A)

Both (A) and (R) are true and (R) is not the correct explanation of (A)

(A) is true but (R) is false

(A) is false but (R) is true

answer is A.

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Detailed Solution

In the seventeenth and eighteenth centuries, merchants from European cities began to relocate to the countryside as a result of trade guilds, organisations of manufacturers, educated craftsmen, and artisans that prevented new entrants into the trade. These were producer associations that educated artisans, maintained control over production, regulated competition and prices, and barred new entrants into the trade. Kings granted different guilds monopolies to produce and trade in specialised products. As a result, new merchants found it difficult to establish themselves in towns. As a result, they relocated to the countryside.
Thus, both the Assertion and Reason are true, and the Reason is the correct explanation of the Assertion.

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