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An attempt to explain that vertical integration is more efficient than contracting for goods and services in the marketplace when the transaction costs of buying goods on the open market becomes too great has been proposed by___________.

Respuesta :

jepessoa

Answer:

transaction cost economics

Explanation:

The reason why a company might choose to grow vertically is to take over a  function previously provided by either a supplier (upstream) or a distributor (downstream).

Transaction cost economics theory states that the most efficient organizational structure s the one that minimizes the costs of exchange. Each transaction carried out by a company generates coordination costs, so the number of transactions should be minimized in order to reduce costs.