Question

Consider a business firm that has an organization you understand well. Try to explain why the firm buys certain inputs and makes the remainder (in the context of minimizing transactions costs).

Answer 1

Step-by-step explanation:

The largest companies in the world in the technology sector that sell products such as cell phones and computers have a global value chain that organizes the production process in a set of steps with the objective of generating strategic and cost advantages. Such companies as Apple, buy inputs originating in China for example for the manufacture of Iphones, because the cost of the raw material is lower and it also manufactures the devices in the country, due to the better labor conditions, so the company reaches gains in economies of scale.