Which of the following statements is true of internal transaction costs?
A. Internal transaction costs arise when companies transact in the open market.
B. When the internal costs involved in pursuing an activity in-house are more than the costs of transacting, then the concerned firm should vertically integrate.
C. Internal transaction costs tend to increase with organizational size and complexity.
D. It is beneficial to "buy" goods or services rather than "make" when internal transaction costs are low.
Answer: Internal transaction costs tend to increase with organizational size and complexity.