From the transaction cost analysis, market failure typically happens when
transaction-specific assets become valuable.

Name: From the transaction cost analysis, market failure typically happens when transaction-specific assets become valuable.
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Question

Quizplus · Accepted Answer

When transaction-specific assets become valuable, the costs of writing and enforcing a contract will increase, creating a higher likelihood of market failure due to incomplete contracts or difficulties in negotiating specific terms.

From the Transaction Cost Analysis, Market Failure Typically Happens When