Markets Reduce Transactions Costs _____

question 104

Multiple Choice

Markets reduce transactions costs _____

• A) by decreasing the time spent searching for information about goods and services.
• B) only if they have a highly structured set of rules like the New York Stock Exchange does.
• C) because each market uses the same set of rules for buying and selling goods and services.
• D) only when the government coordinates the plans of many buyers and sellers.
• E) when prices are set by the sellers and are not determined by negotiation between buyers and sellers.

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Definitions:

Sales Commission

Compensation paid to sales employees as a percentage of the sales they generate, meant to incentivize higher sales.

Incremental Analysis

A decision-making tool used in finance and accounting to determine the cost and benefit changes resulting from a specific business decision.

Variable Manufacturing Cost

This is a subset of variable costs, referring specifically to costs that fluctuate with manufacturing output, such as raw materials and direct labor costs.

Fixed Manufacturing Cost

Costs that do not fluctuate with the volume of production, such as rent, salaries, and maintenance.