If the quality of an input is easily determined at the time of purchase,then it is likely to _____

Question

Quizplus · Accepted Answer

When the quality of an input is easily determined at the time of purchase, it reduces the uncertainty and risk associated with the transaction. This makes it more efficient for firms to purchase these inputs in the market rather than producing them internally, as the transaction costs associated with ensuring quality are low.

If the Quality of an Input Is Easily Determined at the Time