There are obviously advantages and disadvantages to making decisions within a firm rather than relying upon the marketplace. BRIEFLY describe the characteristics of transactions that are better suited for the vertically integrated firm and those better suited for the market.
The characteristics of transaction that are better suited for vertically integrated firms and those better suited for the market are
1. Understanding the company'a current relationship with its providers.
2. It helps to identity the four main points on integration that is,
a. behaviour of persective
b. RReducing the effect of frequency
c. Uncertainty and
d. specificity
3. It eexchanges agents involves in transaction cost of different degrees.
4. The level of transactions specific investment and the frequency that transactions accurs.
6. The transactions for commodities may be also though letters, telegrams, telephones, e-mail etc.
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