Since the owners are residual income claimants, increased efficiency will mean a higher income for the owners. If production is not conducted efficiently, the firm will be unable to compete effectively and will experience losses that will reduce the wealth of the owners. Both b and c are correct. During the short-run period of the production process, a firm will be unable to vary any of its factors of production. Firms can better exploit team production than market coordination of production.
Firms avoid some of the transaction costs associated with market coordination of production.
All of the above correctly answer the question.