transaction costs
Price of trading
Transaction costs are the expenses incurred in making an economic exchange beyond the price of the good or service itself.
These include search costs, bargaining costs, legal fees, and the time spent finding buyers or sellers and negotiating terms.
In economics, transaction costs explain why firms exist—some activities are cheaper to coordinate internally than through markets.
The transaction costs of selling the house ate into our profit.
- legal feesPayment for counsel
- contract enforcementEnsuring contractual terms are honored
- property rightsLegal control over possessions
- market researchAnalyzing buyer preferences systematically
- opportunity costSacrificed alternative's worth
time is money · dispute resolution · externalities · arbitration · auditing · due diligence · market failure · compliance checks · moral hazard · skin in the game · fraud prevention · mediation · overhead · efficiency · risk assessment · regulatory oversight · information · haggling
transaction costssticker price
Manufacturer's suggested retail amount
purchase price · intrinsic value · face value · production costs · direct costs