When a firm is more efficient in organizing economic activity than markets are, the firm should ______.

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10-08-2022
Business

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When a firm is more efficient in organizing economic activity than markets are, the firm should ______.

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tripatsingh039 tripatsingh039 · Answer 1 · 2022-08-13T14:16:52+02:00

When a firm is more efficient in organizing economic activity than markets are, the firm should vertically integrate.

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Any economic system in which people meet their needs through the division of labor, cooperative production, and the trade of goods and services must include the business as a key institution. Firms are a crucial component of the system because they generate the commodities and services that are sold on the open market, fulfilling many requirements while also allowing each individual to specialize in their line of employment. Businesses exist as separate legal entities with unique trade names. Social sciences in general and economics in particular are interested in how firms vary in size, the range of goods and services they offer on the market, and the activities and resources they govern internally.

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