A key reason for the existence of firms is that, compared to markets, firms often achieve lower
A) explicit costs.
B) transactions costs.
C) accounting costs.
D) scope of team production.

Question

Quizplus · Accepted Answer

Firms often achieve lower transaction costs compared to markets because they can internalize exchanges and reduce the costs associated with negotiating and enforcing contracts.

A Key Reason for the Existence of Firms Is That