Which of the following is the best definition of transaction cost?
A)the cost of changing prices
B)the cost of participating in a market
C)the cost of finding suitable products
D)the cost merchants pay to bring their goods to market

Question

Quizplus · Accepted Answer

Transaction cost refers to the cost of participating in a market, including the cost of finding suppliers, negotiating prices, completing the transaction, and enforcing contracts. This cost can arise due to factors such as information asymmetry, the presence of intermediaries, or the complexity of the market structure. The other options (A, C, and D) are incorrect as they do not capture the full extent of transaction costs.

Which of the Following Is the Best Definition of Transaction