Final answer:
The costs that are incurred when a good is purchased in one market and resold in a different market are known as transaction costs. These costs can include expenses such as transportation, import/export fees, tariffs, and currency exchange rates.
Step-by-step explanation:
The costs that are incurred when a good is purchased in one market and resold in a different market are known as transaction costs. These costs can include expenses such as transportation, import/export fees, tariffs, and currency exchange rates.
For example, if a company buys goods from a foreign supplier and then sells them in their domestic market, they may incur additional costs for shipping the goods, paying customs duties, and converting currencies.
Understanding and managing transaction costs is important for businesses involved in international trade as they can significantly impact profitability and competitiveness.