Which of the following is true?
A)Successful firms have lower transaction costs than markets do
B)A legal system that protects ownership rights is critical to the efficient functioning of firms and markets
C)Markets measure and reward performance
D)Markets allocate resources to their highest value use
E)All of the above

Question

Quizplus · Accepted Answer

All of the above statements are true. Successful firms often have lower transaction costs than markets do, but both firms and markets play important roles in resource allocation. A legal system that establishes and protects property rights is essential for both firms and markets to function smoothly. Markets measure performance and reward success through profits and incentives, and markets tend to allocate resources to their most valuable uses through the price mechanism.

Which of the Following Is True