Economists Alchian and Demsetz Suggest That Firms Are Formed When

question 218

Multiple Choice

Economists Alchian and Demsetz suggest that firms are formed when

• A)the sum of what individuals can produce alone is greater than what they can produce as a team.
• B)someone wants to earn profits.
• C)someone comes up with the idea that customers will buy a new product.
• D)the sum of what individuals can produce as a team is greater than the sum of what they can produce alone.

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Definitions:

Net Price

The actual price paid for a product or service after subtracting any discounts, rebates, or allowances.

Discount

A reduction applied to a regular price or rate, often used as an incentive for purchasing goods or services.

Mark-up

The amount added to the cost price of goods to cover overhead and profit; the difference between the cost and selling price.

Retail Prices

The price at which goods and services are sold to the end consumer, inclusive of markup and VAT.