Although we have emphasized team
production as creating a costly metering
task and have treated team production as
an essential (necessary?) condition for the
firm, would not other obstacles to cheap
metering also call forth the same kind of
contractual arrangement here denoted as
a firm? For example, suppose a farmer
produces wheat in an easily ascertained
quantity but with subtle and difficult to
detect quality variations determined by
how the farmer grew the wheat. A vertical
integration could allow a purchaser to
control the farmer's behavior in order to
more economically estimate productivity.
But this is not a case of joint or team
production, unless "information" can be
considered part of the product. (While a
good case could be made for that broader
conception of production, we shall ignore
it here.) Instead of forming a firm, a buyer
can contract to have his inspector on the
site of production, just as home builders
contract with architects to supervise building
contracts; that arrangement is not a
firm. Still, a firm might be organized in
the production of many products wherein
no team production or jointness of use of
separately owned resources is involved.