If we assume perfect information, perfect mobility of resources, and no transactions costs, then there is little need for firms.

Question

Quizplus · Accepted Answer

If there is perfect information and perfect mobility of resources, then there is no advantage to firms in terms of accessing information or resources. Any individual can easily access the necessary information and resources on their own, eliminating the need for firms to exist. Additionally, with no transaction costs, there is no need for firms to coordinate exchanges or transactions between different parties.

If We Assume Perfect Information, Perfect Mobility of Resources, and No