Which of the following is not considered a transaction cost incurred by parties in the process of contracting to eliminate a pollution externality?

Question

Quizplus · Accepted Answer

Costs incurred to reduce the pollution are not transaction costs, but rather direct costs of addressing the externality itself. Transaction costs refer specifically to the costs incurred by parties in the process of negotiating and enforcing an agreement to address the externality. Choices A, C, and D are all examples of transaction costs.

Which of the Following Is Not Considered a Transaction Cost