Markets are usually preferred by economists for efficient transactions.However,Ronald Coase noted that administrative solutions may be superior because market transactions are:
A)never achieved at the equilibrium price.
B)not costless.
C)always result in a price that clears the market.
D)hindered by technological change.

Question

Quizplus · Accepted Answer

Market transactions are not costless, as there may be transaction costs such as search costs, bargaining costs, and enforcement costs. Administrative solutions can sometimes be superior if they can reduce these transaction costs.

Markets Are Usually Preferred by Economists for Efficient Transactions