The growth in the scope of business enterprises for most of the 19th and 20th centuries can be attributed to a drop in administrative costs of firms relative to the transaction costs of market.This resulted from:
A)The monopolistic power of large firms to raise prices and push down wages
B)Globalization
C)The growing transaction costs of markets as a result of taxes,regulation,and litigation
D)Innovation in information and communications technology and in management

Question

Quizplus · Accepted Answer

The growth in the scope of business enterprises for most of the 19th and 20th centuries can be attributed to innovation in information and communications technology and in management. This made it possible for firms to reduce their administrative costs, making them more efficient and competitive relative to the transaction costs of the market. As a result, firms could expand their scope of operations and achieve economies of scale, while maintaining profitability. The other options (monopolistic power, globalization, and growing transaction costs of markets) do not adequately explain the overall trend of business growth during this period.

The Growth in the Scope of Business Enterprises for Most