A condition which adversely affects expansion of production is

The condition which adversely affects the expansion of production is the limited size of the market. When the market size is limited, it means that there is a small number of potential customers for the products produced. This limits the demand for the goods or services, which makes it difficult for the producers to increase their production levels. In such a scenario, even if the producer has enough funds, has effective management and the prospect of increased profits, they may still not be able to expand their production. This is because there is a limited demand for their products, which means that any increase in production will not be met with a corresponding increase in sales. As a result, the producer will be forced to operate below their potential capacity, which will adversely affect their ability to expand their business. Therefore, the limited size of the market is a major factor that can limit the growth and expansion of production.