Which of the following is the best example of a transactions cost?
A) the value of the time spent negotiating a contract
B) the price of a new set of tires
C) the cost associated with producing a golf club
D) the price of labor and materials used to produce a house
E) the price of food

Question

Quizplus · Accepted Answer

Transaction costs refer to the costs involved in making a transaction, such as the negotiation costs, communication costs, legal costs, and search costs. The value of the time spent negotiating a contract is an example of a transaction cost. The other options are either the cost of production or the price of a good, but do not relate specifically to transaction costs.

Which of the Following Is the Best Example of a Transactions