One of the factors explaining the emergence of large firms during the 19th and the early 20th centuries, is:
A)The evolution of customers' tastes over time
B)The development of management techniques
C)The improvement in telecommunications
D)The decrease in administrative costs of the firm relative to the transaction costs

Question

Quizplus · Accepted Answer

The decrease in administrative costs of the firm relative to the transaction costs allowed firms to become larger and more efficient in managing their resources. This was due to the development of new technologies, such as the assembly line and the use of specialized machinery, which reduced costs and increased productivity. As a result, firms were able to produce a larger volume of goods at a lower cost, making them more competitive in the market.

One of the Factors Explaining the Emergence of Large Firms