When is it better for a construction ﬁrm to hire architects rather than contract them through the market?
A) When the in-house contracts with the architects is complete.
B) When it is diﬃcult to monitor the performance of the hired architects.
C) When the transaction costs of contracting them through the market are low.
D) When the enforcement of the market contracts is diﬃcult.

Question

Quizplus · Accepted Answer

When the enforcement of market contracts is difficult, it becomes more efficient for a construction firm to hire architects directly. This is because direct employment can offer better control and coordination, reducing the risks associated with contract enforcement issues.

When Is It Better for a Construction ﬁRm to Hire