It Is Reasonable to Assume That If There Were No

question 72

Multiple Choice

It is reasonable to assume that if there were no transaction costs in organizing production, _____.

• A) contracts would be incomplete
• B) mergers would not add value to firms
• C) diversification would increase the financial risk of a company
• D) firms would not need to exist

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Definitions:

Stateless Companies

Businesses that operate globally without being primarily affiliated or located in a single country.

Transnational

Pertaining to or operating across national borders, often used to describe corporations, investments, or activities that are not confined to a single country.

Transnational Company

A multinational corporation that operates across multiple countries, maintaining significant operations and management in more than one country.

Centralized Authority

An organizational structure where decision-making and control are concentrated at the top levels of management, with little delegation of authority to lower levels.