Question

Ronald Coase:

		said that the way firms organize production exploit labor.
		said that firms exist when the transactions costs of doing business are greater than the costs of organizing through market exchange.
		Said that firm size was independent of transaction cost.
		The previos two choices are both correct.

Answer 1

The Coase theorem can be defined as a legal and economic theory that states that where there are complete competitive markets with no transactions costs, an efficient set of inputs and outputs to and from production-optimal distribution are selected irrespective of how property rights are divided.

In other words, the Coase theorem states that when property rights are involved, parties naturally tends toward the most efficient and mutually beneficial outcome.

Ronald Coase Said that firm size was independent of transaction cost.

Hence option third is the correct answer.

Third; Said that firm size was independent of transaction cost.