Which of the following is the primary disadvantage of producing inputs within a firm?

Question

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Producing inputs within a firm can lead to loss of specialization as the firm may have to divert resources away from its core competency to produce the additional inputs. This can reduce the firm's overall efficiency and productivity. While producing inputs within a firm can reduce transaction costs and mitigate hold-up problems, it may not necessarily lead to reductions in opportunism.

Which of the Following Is the Primary Disadvantage of Producing