Which of the Following Is Not Considered a Transaction Cost

question 55

Multiple Choice

Which of the following is not considered a transaction cost incurred by parties in the process of contracting to eliminate a pollution externality?

• A) costs incurred due to lawyers' fees
• B) costs incurred to reduce the pollution
• C) costs incurred to enforce the agreement
• D) costs incurred due to a large number of parties affected by the externality
• E) All of these answers are considered transaction costs.

Apply cost-volume-profit (CVP) analysis to predict how changes in costs, sales volume, and price affect a company's profit.

Identify and classify costs as variable, fixed, or mixed based on given scenarios.

Calculate break-even points in units and dollars using relevant formulas.

Use target income analysis to determine required sales in units or dollars to achieve a desired profit level.