In a world of perfect information, if consumers could costlessly contract with private contractors to produce a good and there were no economies of scale,

Question

Quizplus · Accepted Answer

In a world of perfect information and no economies of scale, consumers could costlessly contract with private contractors to produce a good, eliminating the need for firms. This is because contracting directly with private contractors would be more efficient and cheaper than going through a firm, which incurs additional costs such as administration, marketing, and overhead expenses.

In a World of Perfect Information, If Consumers Could Costlessly