Problem
Firm Alpha is trying to find a manufacturer to produce and supply one of Firm Alpha's inputs. The production of this particular input requires an investment in a highly specialized process that is unique to Firm Alpha's requirements; that is, the production process for the input has no use other than to produce Firm Alpha's input. Based on material covered in lecture, how does Firm Alpha's inability to sign a complete contract with any potential supplier suggest that Firm Alpha may end up producing the input itself? Would your answer change if Firm Alpha were able to sign a complete contract with any potential supplier? Why or why not?