The expenses you encounter when you buy in one market and sell in a distant market are known as
A)production costs.
B)fixed costs.
C)transactions costs.
D)sunk costs.

Question

Quizplus · Accepted Answer

The expenses incurred when buying in one market and selling in a distant market are referred to as transaction costs. They include transportation costs, taxes, customs duties, insurance fees, and other expenses associated with shipping goods from one market to another. Production costs (A) refer to the expenses incurred in producing goods, while fixed costs (B) refer to expenses that do not change with changes in the level of production. Sunk costs (D) are past costs that cannot be recovered and are irrelevant for future decisions.

The Expenses You Encounter When You Buy in One Market