Markets reduce transactions costs

Question

Quizplus · Accepted Answer

Markets reduce transaction costs by providing a centralized location for buyers and sellers to gather and exchange information about goods and services, thereby decreasing the time spent searching for information. This is especially true in efficient markets where information is readily available and accessible to all participants. The other answer choices are incorrect. B is incorrect because highly structured markets can sometimes become too rigid, and may actually increase transaction costs. C is incorrect because not all markets use the same set of rules for buying and selling goods and services. D is incorrect because government intervention can sometimes lead to inefficiencies and increased transaction costs. E is incorrect because negotiated prices can actually reduce transaction costs by allowing buyers and sellers to reach mutually beneficial agreements.

Markets Reduce Transactions Costs