A transaction cost is:
A) a cost paid by the consumer or the producer.
B) a cost paid by people other than the consumer or the producer trading in the market.
C) the cost to everyone.
D) the cost of reaching an agreement.

Question

Quizplus · Accepted Answer

A transaction cost refers to the cost incurred in the process of reaching an agreement between a buyer and a seller, such as the cost of researching a product, negotiating a price, or drafting a contract. It does not necessarily refer to a cost paid by the consumer or producer or a cost borne by others in the market, but rather the direct cost of the transaction itself.

A Transaction Cost Is