The theory of transaction cost analysis states that:

A. Short-term increases in sales volume will eliminate any switching costs acquired as the result of replacing an independent agent with an internal sales force
B. The costs of product failure will be minimized with the use of an independent agent and maximized with an internal sales force
C. When substantial transaction-specific assets are necessary to sell a manufacturer's product, the costs of using and administering independent agents is likely to be higher than the costs of hiring and managing an internal sales force
D. Costs of using and administering independent agents tend to rise faster as the manufacturer's sales volume increases
E. When substantial transaction-specific assets are necessary to sell a manufacturer's product, the costs of using and administering independent agents is likely to be lower than the costs of hiring and managing an internal sales force

Ans: C. When substantial transaction-specific assets are necessary to sell a manufacturer's product, the costs of using and administering independent agents is likely to be higher than the costs of hiring and managing an internal sales force