Ronald Coase departed from the neoclassical tradition of economic thought by arguing that ______________.

Question

Quizplus · Accepted Answer

Ronald Coase's work, particularly in "The Nature of the Firm" (1937), argued that firms exist because they reduce transaction costs that would otherwise be higher in a market setting, indicating that markets are not frictionless. This encompasses all the points listed: the existence of firms as evidence against frictionless markets (A), the characterization of markets by transaction costs (B), and firms acting to reduce these frictions (C).

Ronald Coase Departed from the Neoclassical Tradition of Economic Thought