Transactions costs are costs that violate:
A)the rules of market allocation.
B)the Coase theorem.
C)the rules of the game.
D)economic property rights.

Question

Quizplus · Accepted Answer

Transaction costs are costs associated with making an economic exchange. The Coase theorem posits that if trade in an externality is possible and there are no transaction costs, parties will bargain to correct any inefficiency in allocation. Thus, transaction costs can be seen as a violation of the ideal conditions described by the Coase theorem, where such costs prevent or complicate the process of reaching an efficient outcome through bargaining.

Transactions Costs Are Costs That Violate