First, as a firm gets larger, there may be decreasing
returns to the entre reneur function, that is, the casts of
organising additional transactions within the firm may
risefi Naturally, 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
entrepreneur.
First, as a firm gets larger, there may be decreasingreturns to the entre reneur function, that is, the casts oforganising additional transactions within the firm mayrisefi Naturally, a point must be reached where the costsof organising an extra transaction within the firm are equalto the costs involved in carrying out the transaction inthe open market, or, to the costs of organising by anotherentrepreneur.
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