Transaction costs

Transaction costs Meaning:
Costs involved in making economic exchanges such as buying and selling. Transaction costs are often not taken into account, which leads to a misevaluation of the transaction.

Transaction costs Example:
Consider the prospective purchaser of a refrigerator. The purchase price of the refrigerator that is eventually bought is not the only cost involved. Transaction costs such as the time spent researching the best brand and model, and the cost of travelling to wherever that item is available for purchase increase the real cost of the purchase.