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Flura [38]
3 years ago
10

According to coase's theory of the firm, why do firms exist? how do firms contribute to the efficiency of the market economy in

ways that 'networks of independent contractors' do not? how are the boundaries of the firm best established?
Business
1 answer:
dezoksy [38]3 years ago
8 0
Published “The Nature of the Firm” According to Coase's Theory of the firm, firms exist because going to the market all the time can impose heavy transaction costs.<span>Firms exist to economize on the cost of coordinating economic activity.
</span><span>Increasing marginal costs of organizing more transactions within the firm and <span>decreasing returns of managerial ability (knowledge, computation limits..) are the boundaries of the firm.</span></span>
You might be interested in
State the following statement is True or False, and explain why. Thor who lives in Montana purchased a car produced in Japan for
Likurg_2 [28]

Answer:

false

His purchase left GDP unchanged

Consumption of non durables would increase.

Also, net export would decrease.

these effects would cancel out

Explanation:

Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year

GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export

Net export = exports – imports

3 0
3 years ago
National Bank quotes the following for the British pound and the New Zealand dollar: Quoted Bid Price Quoted Ask Price Value of
Snowcat [4.5K]

Answer:

$15.43

Explanation:

Following actions are required for triangular arbitrage:

Available: $ 10,000

Buy sterling pound @ 1 $ = 1.62 pounds and receive pounds 6172.84 upon conversion.

Now, sell these pounds and purchase NZ $ at the rate :

1 pound = NZ $ 2.95 and receive NZ$ 18209.87

Now, reconvert the above proceeds into US $ at the rate

1 NZ $ = $0.55 i.e sell NZ $ at this rate and receive US $ 10,015.4285

Hence profit from implementing triangular arbitrage is $10,015.43 - $10,000

= $15.43

Arbitrage refers to the prospect of earning a profit by utilizing the mispricing in two different financial markets. An arbitrageur never uses his own funds and always borrows.

Arbitrage works only in the scenario wherein the interest rate purchase parity (IRPT) does not hold good.

The strategy of arbitrage is best explained as "Buy at low price and sell at a high price".

 

7 0
3 years ago
A coffeemaker manufacturing company is planning a new coffeemaker that features 12 cup sizes, five brew strengths, three auto-ti
marta [7]

Answer:

Feature fatigue.

Explanation:

Feature fatigue is an inclination for buyers to avoid products that seem, by all accounts, to be feature-rich. It is a cutting edge wonders that has happened because of the blast in the quantity of features stuffed into products and services.

8 0
3 years ago
A manager is trying to decide whether to purchase a certain part or to have it produced internally. Internal production could us
Sergio [31]

Answer:

For both 10,000 units and 20,000 units, the best alternative is Vendor B

Explanation:

Using the information provided in the question, we can write the following:

Annual Volume of 10,000 units

Internal Alternative 1

Variable costs = 170,000 (we multiply the variable cost per unit by total units)

Fixed costs = 20,000

Total costs = 370,000

Internal Alternative 2

Variable costs = 140,000

Fixed costs = 240,000

Total costs = 380,000

Vendor A

Total cost = 200,000 (we simply multiply the price by the quantity)

Vendor B

Total cost = 180,000

Vendor C

Total cost = 190,000

The cheapest option is Vendor B

Now for the 20,000 units:

Internal Alternative 1

Variable costs = 340,000

Fixed costs = 200,000

Total costs = 540,000

Internal Alternative 2

Variable costs = 280,000

Fixed costs = 240,000

Total costs = 520,000

Vendor A

Total cost = 400,000

Vendor B

Total cost = 360,000

Vendor C

Total cost = 380,000

Therefore, Vendor B is once again, the cheapest alternative.

5 0
3 years ago
How does a mayor-council system function?​
ValentinkaMS [17]

Answer:

The mayor is basically the city's chief executive, Meanwhile the council is the city's primary legislative body if you will. These make up general characteristics of a strong mayor council of governments . Therefore the mayor could or may appoint and remove departmental heads. The mayor can also draft and propose a budget to the city council basically.

7 0
3 years ago
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