3687EconomicsMedium
Which of the following is not considered a transaction cost incurred by parties in the process of contracting to eliminate a pollution externality?
AAll of these answers are considered transaction costs
Bcosts incurred to enforce the agreement
Ccosts incurred due to lawyers’ fees
Dcosts incurred due to a large number of parties affected by the externality
Ecosts incurred to reduce the pollution
Correct answer
E. costs incurred to reduce the pollution
Explanation
The correct answer is costs incurred to reduce the pollution.