A "do-it-yourself" approach to production is more likely when ___

Question

Quizplus · Accepted Answer

A "do-it-yourself" approach to production is more likely when the prices of inputs are known. When a firm knows the prices of inputs, it can easily calculate the cost of producing the good or service in-house versus outsourcing production. This calculation can help the firm determine whether it is more cost-effective to produce the good or service in-house or to purchase it from an outside supplier. If the prices of inputs are unknown or difficult to identify, it may be more difficult for the firm to make this calculation, making a do-it-yourself approach less likely.

A "Do-It-Yourself" Approach to Production Is More Likely When ___