Evidence item

Coase’s original account makes firm size a marginal comparison between internal organizing costs and market costs, and also emphasizes rising internal organizing costs; it therefore qualifies a simple zero-market-cost implication. DIRECT_TEXT

Authenticity UNVERIFIED · extraction UNVERIFIED · independence group none (unreviewed) · created seq 15780

Source: The Nature of the Firm · locator {} · excerpt hash sha256:564f5ac8b64002bf16cba5c3f9cab29128311eb0ce1e56d5c359b76203412149

A point must be reached where the costs of organising an extra transaction within the firm are equal to the costs involved in carrying out the transaction in the open market, or to the costs of organising by another method. Other things being equal, a firm will tend to be larger the less the costs of organising and the slower these costs rise with an increase in the transactions organised.