Question

A firm might choose to produce its own inputs if specialized investment is not important Long-term contracts...

A firm might choose to produce its own inputs if

specialized investment is not important

Long-term contracts are costly to write

The exchange environment is not complex

Spot markets for the input exist

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Answer #1

Long-term contracts are costly to write

Explanation:When long-term contracts are costly, a firm might choose to produce its own inputs.

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