The Fundamental Reason for the Existence of Transaction Costs Is

question 9

Multiple Choice

The fundamental reason for the existence of transaction costs is:

• A)the absence of perfect property rights.
• B)the sheer number of transactions in an economy.
• C)the fact that information is costly.
• D)the fact that all economic agents have the same information.

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Definitions:

Direct Labour

The work performed by individuals directly involved in the manufacturing of products or providing services, whose costs are directly attributable to the products or services.

Direct Materials

The raw materials and components that are directly used in the manufacturing of a product and can be directly attributed to that product.

Operating At Capacity

Operating at capacity involves a business running at the maximum output or efficiency level possible with current resources and constraints.

Contribution Margin

Contribution margin is the amount by which sales revenue exceeds variable costs, representing the portion of sales revenue that contributes to covering fixed costs.