Author Question: Transaction costs reduce the benefit accruing to the parties involved in an exchange. Explain ... (Read 29 times)

OSWALD · **on:** Jun 30, 2018

Transaction costs reduce the benefit accruing to the parties involved in an exchange. Explain why.

Question 2

When a firm grows to such an extent that it is unable to coordinate between its employees properly it is likely to experience economies of scale.
a. True
b. False
Indicate whether the statement is true or false

jojobee318 · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

Transaction costs reduce benefits to the two parties because a part of the economic value goes into funding the transaction cost.

Answer to Question 2

False