Stores that are located in areas that offer a low transaction cost to consumers are more likely to be able to charge higher prices than stored located in areas with high transaction costs.

Question

Quizplus · Accepted Answer

When transaction costs are low, consumers are more willing to travel to access specific stores, and as a result, those stores can charge higher prices. In contrast, stores located in areas with high transaction costs (such as time, effort, or money required to get there) need to offer competitive prices to entice consumers to visit them.

Stores That Are Located in Areas That Offer a Low