1. By implication of the definition of input, any good requires more than one inputs to be produced.
2. Let's group inputs to produce a good g into two groups: on the one hand input i, and on the other hand all the rest of inputs, which we will call (composite) input j. Let's don't call it input i anymore. Since now on, let's call it good i.
3. Transaction cost from good i to good g, or good g's transaction cost from good i, or beginning with good i, is the value of input j.
4. The fact that the term "transaction cost" is mostly used when the value of good i is much dearer than the value of good j doesn't introduce anything analytically relevant to the analysis.
Sunday, March 17, 2013
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