--%>

Analyzing regions leading transaction costs

Analyze at least 3 possible regions for the industry which could lead to transaction costs, explaining each in detail.

E

Expert

Verified

There are many areas to determine and influence on the transaction costs. Some of the areas are uncertainty in many levels, organizational capabilities noise regulation and inter organizational exchanges In the inter organizational exchange, the transaction cost plays a vital role. It is used in the firms who horizontally link to cooperate. Always the decisions depend on various aspects of the situation where the position of the transaction cost is getting influenced. If the transaction costs become very high, for the inter organizational exchange another third party would make the resolution. The variations in the transaction costs are done by the empirical analysis. Actually the transaction cost is reduced by the perpendicular integration. Many big firms have capabilities to handle the transaction costs. This way helps them to use the financial assets. Thus the horizontal and vertical integrations influence on the levels of the transaction costs. The investment capacity, facilities given in the airplanes, passenger payments are also possible for the influence. They may follow the rules and regulations of the foreign government.  There is also the possibility of higher risks. If any problem arises in the voluntary cooperation or any merging, there is possibility of increase in the transaction costs. This ultimately results in the increasing transaction costs. The transaction costs have influence on the free market mechanisms. There are many aspects to be considered in the transaction costs and the market mechanisms. The regulatory, judicial, and political mechanisms are possible to failure due to the high transaction costs. Noise is also considered for regulation in determining the transaction costs.  But in case of the larger firms they never consider the costs increase as they are particular about the services and quality given to the customers. Thus the transaction costs have influence on the inter organizational change, higher levels of uncertainty and organizational capabilities.

   Related Questions in Macroeconomics

  • Q : Surplus of the good Describe when there

    Describe when there will be a surplus of the good?

  • Q : Federal fiscal stimulus in 2009

    Question: Was the stimulus package passed in 2009 as success?  In answering this question the focus should be the articles on the syllabus, but you should also include opinions of other commentators. &nbs

  • Q : Fiscal policy actions What possible

    What possible fiscal policy actions can be taken with respect to expenses and income to accurate excess demand and deficient demand in economy? Answer:

  • Q : Reduction in quantity When equilibrium

    When equilibrium moves from point a to point b in the figure shown below, the only market experiencing a reduction in quantity supplied is illustrated in: (1) Panel A. (2) Panel B. (3) Panel C. (4) Panel D.

    Q : Supply law and it's factors State the

    State the Law of supply and explain the factors that affecting supply of commodity

  • Q : Maximizing consumer utility The

    The consumer maximizes the utility whenever spending patterns causes: (i) Total outlays to increase each time prices are altered. (ii) Marginal utilities of each and every good consumed to be equivalent. (iii) Marginal utilities from the last cent spent on each and ev

  • Q : Total revenue when price modify When

    When total revenue to a firm is unaffected by small price modifications, then demand is: (i) Relatively price elastic. (ii) Relatively price inelastic. (iii) Unitarily price elastic. (iv) Vertical. (v) Horizontal. Can someone help

  • Q : Fundamental supply and demand in foreign

    Question: Changes in currency supply and demand can be traced back to changes in fundamental supply and demand in foreign and domestic i._____________________ markets and foreign and domestic ii.___________________

  • Q : Value of exports of goods A country’s

    A country’s balance of trade is Rs. 75 crores. The value of imports of goods is Rs. 100 crores. What is the value of exports of goods?

  • Q : Another name of macroeconomics What is

    What is another name of macroeconomics? Answer: Income theory