Which of the following is an advantage of carrying out economic transactions through firms?
A)The number of transactions carried out by a firm is fewer than that carried out in a market,thereby reducing the contracting cost.
B)Firms lack knowledge about the products they produce and distribute in a market.
C)Transactions made by or with a firm involve no opportunity cost.
D)The number of transactions carried out by a firm is more than that carried out in a market,thereby reducing the contracting cost.

Question

Quizplus · Accepted Answer

Carrying out economic transactions through firms reduce the number of transactions needed, which can lead to a reduction in contracting costs. This is because firms can coordinate and plan production and distribution processes internally, rather than having to engage in numerous individual transactions with different market participants.

Which of the Following Is an Advantage of Carrying Out