Production Through the Firm Is Often More Efficient Than Market

question 112

Multiple Choice

Production through the firm is often more efficient than market exchange when:​

• A)it involves multiple transactions among many resource owners.
• B)it involves the exchange of one good or service for other goods or services.
• C)the cost of transacting business through market relations is less than the cost of undertaking the same activity within the firm.
• D)inputs are easily identified, measured, priced, and hired.
• E)the costs of determining inputs and negotiating contracts are low.

---

Definitions:

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including material, labor, and overhead expenses.

Inventory

Items held for sale in the ordinary course of business, or materials and supplies used or consumed in the production process.

Accounts Payable

Money owed by a company to its creditors or suppliers for goods and services received but not yet paid for.

Income Tax Expense

The cost incurred by businesses or individuals due to taxes on their income.