Transaction costs are:
A)the price paid for a good
B)the cost that society places on a good
C)what it costs two parties to negotiate with each other
D)the same as a Pigovian tax

Question

Quizplus · Accepted Answer

Transaction costs refer to the costs incurred by two parties in negotiating and completing a transaction, such as the cost of finding a buyer or seller, legal and administrative fees, and other associated costs. It does not refer to the price paid for the good, the societal cost of the good, or a Pigovian tax.

Transaction Costs Are