The Theory of Transaction Cost Analysis States That

question 46

Multiple Choice

The theory of transaction cost analysis states that:

• A) Short-term increases in sales volume will eliminate any switching costs acquired as the result of replacing an independent agent with an internal sales force
• B) The costs of product failure will be minimized with the use of an independent agent and maximized with an internal sales force
• C) When substantial transaction-specific assets are necessary to sell a manufacturer's product, the costs of using and administering independent agents is likely to be higher than the costs of hiring and managing an internal sales force
• D) Costs of using and administering independent agents tend to rise faster as the manufacturer's sales volume increases
• E) When substantial transaction-specific assets are necessary to sell a manufacturer's product, the costs of using and administering independent agents is likely to be lower than the costs of hiring and managing an internal sales force

---

Definitions:

Drug Abuse

The misuse or overuse of drugs, typically for non-medical reasons, leading to potential harm to the individual's health, social relations, or ability to function.

Functional Assessment

An evaluation of an individual's physical ability, daily activities, and tasks to determine their capacity to live independently or require assistance.

Wheelchair

A chair mounted on wheels designed for individuals who are unable to walk due to illness, injury, or disability.

Tonsils Removed

The surgical removal of the tonsils, typically due to recurrent infections or obstructive sleep apnea, known medically as tonsillectomy.