The costs in time and other resources that parties incur in the process of facilitating an exchange of goods and services are called
A)enforcement costs.
B)implicit costs.
C)explicit costs.
D)transactions costs.

Question

Quizplus · Accepted Answer

Transaction costs refer to the costs incurred in the process of facilitating an exchange of goods and services, such as searching and gathering information about potential trading partners, negotiating and enforcing contracts, and monitoring and enforcing compliance. Enforcement costs refer specifically to the costs of enforcing contracts or resolving disputes. Implicit costs refer to the opportunity costs of using resources for a particular activity rather than their next best alternative use, while explicit costs refer to out-of-pocket expenses that directly affect the firm's accounting profits.

The Costs in Time and Other Resources That Parties Incur