High transaction costs:
A) occur when specialized investment is not important.
B) make spot exchange an efficient way to obtain inputs.
C) may be a result of buyer opportunism.
D) may be the result of downward-sloping demand.

Question

Quizplus · Accepted Answer

High transaction costs can occur as a result of buyer opportunism, where the buyer tries to take advantage of the seller's lack of information or bargaining power, leading to increased costs associated with information acquisition and contract enforcement. The other choices are not directly related to high transaction costs.

High Transaction Costs