Private solutions may not be possible due to the costs of negotiating and enforcing these solutions.Such costs are called
A)transaction costs.
B)opportunity costs.
C)deadweight loss.
D)corrective taxes.

Question

Quizplus · Accepted Answer

Transaction costs refer to the costs incurred in making an economic transaction, which includes negotiating, enforcing contracts, and monitoring performance. Private solutions may not be possible if transaction costs are too high, making it more efficient for the government to provide a public solution.

Private Solutions May Not Be Possible Due to the Costs