Alchian and Demsetz (1972) discuss the transition from the “putting out” system (a market-based arrangement) to the “factory” system when large central power sources became available. This represents something of a case study of Coase’s model of market versus firm organization. Which statement(s) are true?
a)The technological advance represented by large central power sources and the assembling of workers made contracting through the market less costly
b)The assembly of workers onto a common site increased the opportunity to employ team or joint production through joint use of equipment.
c)Observation of worker behavior and contribution to joint output became easier and favored the market form of organization.
d)All of the above.