One reason why firms replace markets for some activities is that firms
A) reduce the number of transactions required.
B) enable individuals to avoid a large portion of their taxes.
C) reduce the rate at which the product is wasted.
D) do not require team production.

Question

Quizplus · Accepted Answer

Firms replace markets for some activities to reduce the number of transactions required, as they can internalize transactions and reduce transaction costs.

One Reason Why Firms Replace Markets for Some Activities Is