If an upstream firm and a downstream firm want to establish a contract, all of the following costs can be incurred except which one?
A)enforcement costs
B)negotiation costs
C)monitoring costs
D)search costs

Question

Quizplus · Accepted Answer

Search costs are not typically associated with establishing contracts between upstream and downstream firms, as both parties are likely aware of each other's existence and potential for collaboration. Enforcement, negotiation, and monitoring costs, on the other hand, may be incurred during the process of establishing and maintaining a contractual relationship.

If an Upstream Firm and a Downstream Firm Want to Establish