Transactions Costs. Centex Corp. is one of the nation's largest home builders, building and delivering, through its subsidiary Centex Homes, over 10,000 homes per year. Centex's housing operations currently involve the construction and sale of single-family and multi-family homes in over 50 different markets nationwide. These activities also include the purchase and development of land.
A. Use transactions costs to explain the existence of firms like Centex.
B. When will less formal contracting arrangements supplant the need for a formal corporate structure?

Question

Quizplus · Accepted Answer

The Answer of Transactions Costs. Centex Corp. is one of the nation's largest home builders, building and delivering, through its subsidiary Centex Homes, over 10,000 homes per year. Centex's housing operations currently involve the construction and sale of single-family and multi-family homes in over 50 different markets nationwide. These activities also include the purchase and development of land.
A. Use transactions costs to explain the existence of firms like Centex.
B. When will less formal contracting arrangements supplant the need for a formal corporate structure?