Transactions costs are absent when
A) Sellers can easily communicate their prices
B) Buyers can easily locate suppliers and learn their prices
C) Buyers and sellers can arrange transactions without significant obstacles
D) All of these

Question

Quizplus · Accepted Answer

Transactions costs refer to the costs associated with arranging and completing a transaction, such as the cost of searching for a supplier, negotiating prices, and completing the transaction itself. When sellers can easily communicate their prices and buyers can easily locate suppliers and learn their prices, transactions costs are reduced. Similarly, when buyers and sellers can arrange transactions without significant obstacles, transactions costs are minimized. Therefore, all of these factors being absent would lead to a situation with minimal or no transactions costs.

Transactions Costs Are Absent When