Which of the following is an example of an internal transaction cost?
A) the cost of searching for a contract manufacturer
B) the cost of signing a contract with a supplier
C) the cost of buying raw materials
D) the cost of maintaining a production unit

Question

Quizplus · Accepted Answer

Transaction costs can occur within a firm. Considered internal transaction costs, these include costs pertaining to organizing an economic exchange within a firm-for example, the costs of recruiting and retaining employees, paying salaries and benefits, maintaining a production unit, setting up a shop floor, providing office space and computers, and organizing, monitoring, and supervising work.

Which of the Following Is an Example of an Internal