Question

When relation-ship specific exchange occurs in complex contractual environments, the best way to purchase inputs is through:

a. Spot markets

b. Vertical integration

c. Short term agency agreements

d. Long-tern contracts

Answer 1

The best way to purchase inputs in complex contractual environments with relationship-specific exchange is through long-term contracts. So, the correct answer is option d.

Step-by-step explanation:

When relationship-specific exchange occurs in complex contractual environments, the best way to purchase inputs is through long-term contracts. In these situations, long-term contracts provide stability and ensure a steady supply of inputs, which is especially important when there is a high level of interdependence and coordination required between the parties involved. Long-term contracts also allow for better planning and investment in resources, as they provide a longer-term commitment between the buyer and seller.

So, the correct answer is option d.