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. transactions costs. d. explicit costs.

Question

Aliana Fritz

Business

25 May, 18:46

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. transactions costs. d. explicit costs.

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Kelsey Davidson · Answer 1

Transactions costs.

Explanation:

Transactions costs are the cost that a business incurs in the course of making a trade. It is not directly part of the product but is realised during transacting activities.

Examples of transaction cost includes legal fees, charges on communication, cost incurred in finding information on price, and labour that conveys product to the market.

Determining transaction cost is important because if transaction costs are high income will reduce, while low transaction cost result in higher income.