Examples of Transaction cost in the following topics:
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- Firms allow an economy to operate more efficiently and reduce the transaction costs of coordinating production.
- According to Ronald Coase, people begin to organize their production in firms when the transaction cost of coordinating production through the market exchange is greater than within the firm.
- For Coase the main reason to establish a firm is to avoid some of the transaction costs of using the price mechanism.
- Organization into a firm can considerably reduce these costs.
- Organizing production under firms reduces the transaction costs of coordinating production in the market.
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- The cost of retained earnings is slightly less than the cost of common stock, as it excludes transaction costs and taxes associated with dividends.
- The cost of retained earnings or internal funds within a capital structure is similar to the cost of common stock, since it is a component of equity.
- We can think of the cost of retained earnings in relation to the opportunity cost of how we can use these funds elsewhere.
- Generally, the cost of retained earnings is slightly less than the cost of common stock.
- Moreover, internal financing is generally thought to be less expensive for the firm than external financing, because the firm does not have to incur transaction costs to obtain it, nor does it have to pay the taxes associated with paying dividends.
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- There are no major transaction costs.
- Issue of stock: The buyer increases financial slack, which may improve its debt rating and reduce the cost of debt (although not WACC as cost of equity will increase).
- Transaction costs include fees for preparation of a proxy statement, an extraordinary shareholder meeting, and registration.
- Issue of stock (same effects and transaction costs as described above).
- Transaction costs include brokerage fees if shares are repurchased in the market; otherwise, there are no major costs.
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- Marginal cost is the change in total cost when another unit is produced; average cost is the total cost divided by the number of goods produced.
- Economic factors that impact the marginal cost include information asymmetries, positive and negative externalities, transaction costs, and price discrimination.
- Marginal cost is not related to fixed costs.
- When the average cost declines, the marginal cost is less than the average cost.
- When the average cost increases, the marginal cost is greater than the average cost.
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- Sunk costs are retrospective costs that have already been incurred and cannot be recovered.
- Sunk costs are sometimes contrasted with prospective costs, which are future costs that may be incurred or changed if an action is taken .
- The sunk cost is distinct from economic loss.
- The economic loss is the difference between these values (including transaction costs).
- The sunk cost may be used to refer to the original cost or the expected economic loss.
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- In an efficient market, firms can produce goods at the lowest possible cost while individuals can access the goods and services they desire, all while utilizing the least resources possible.
- You had no choice in the transaction, but are experiencing its effects.
- Externalities are an example of economic inefficiency, since those involved in the economic transaction do not bear the full costs of the transaction.
- Similarly, when a transaction produces positive externalities, efficiency is achieved when the government subsidizes the transaction.
- Education is an example of a transaction that has a positive effect on society.
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- An externality is a cost or benefit that affects an otherwise uninvolved party who did not choose to be subject to the cost or benefit.
- In economics, an externality is a cost or benefit resulting from an activity or transaction, that affects an otherwise uninvolved party who did not choose to be subject to the cost or benefit .
- In regards to externalities, the cost and benefit to society is the sum of the value of the benefits and costs for all parties involved.
- The third parties who experience external costs from a negative externality do so without consent, while the individuals who receive external benefits do not pay a cost.
- An externality is a cost or benefit that results from an activity or transaction and that affects an otherwise uninvolved party who did not choose to incur that cost or benefit.
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- This is also known as "public sector marketing" and is somewhat similar to business-to-business transactions.
- Most often, the bid with the lowest cost is accepted.
- Consumer-to-consumer commerce is the completion of transactions between private individuals or consumers.
- Craigslist and eBay usually involve consumer-to-consumer transactions.
- Often, these types of transactions are for a lower cost than if they were conducted through a business, as there is some added risk that the product will be defective or otherwise be not as expected.
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- An externality is an effect of an economic action, the cost or benefit of which is shouldered by someone outside the transaction.
- The cost of an externality is a negative externality , or external cost, while the benefit of an externality is a positive externality, or external benefit.
- Those who suffer from external costs do so involuntarily, while those who enjoy external benefits do so at no cost.
- A voluntary exchange may reduce total economic benefit if external costs exist.
- Here, overall cost and benefit to society is defined as the sum of the economic benefits and costs for all parties involved.
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- How would we record journal entries for each transaction?
- You purchase liability insurance at a total cost of $1,200.
- The class cost $15.Revenue 15 Cash 15or Refund expense 15 Cash 158.
- You purchase liability insurance at a total cost of $1,200.
- The class cost $15.