If services are purchased from others that were once performed internally, then a firm has

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When a firm purchases services from others that were once performed internally, it means that they have outsourced those tasks. Outsourcing can be done to reduce costs, improve efficiency, increase flexibility or focus on core competencies. Downsizing refers to reducing the size of the workforce, while economies of scope and diseconomies of scale refer to cost-related concepts in production.

If Services Are Purchased from Others That Were Once Performed