Certified Supply Chain Professional (CSCP) Practice Exam

What is a primary benefit of lowering transaction costs in a marketplace?

1. Increases complexity in the buying process

2. Discourages competition among suppliers

3. Encourages lower pricing and greater accessibility

4. Eliminates the need for supplier contracts

The correct answer is: Encourages lower pricing and greater accessibility

Lowering transaction costs in a marketplace has a significant impact on pricing and accessibility. When transaction costs are reduced, it directly leads to savings for both buyers and sellers. These savings can be passed down to consumers in the form of lower prices. With lower transaction costs, suppliers can operate more efficiently and are likely to offer their products and services at more competitive prices. Additionally, as transaction costs decrease, it becomes easier for consumers to participate in the marketplace. This increased accessibility means that a broader range of consumers can afford to purchase products and services, thereby stimulating market demand. Essentially, lowering transaction costs facilitates more trading activities, allowing suppliers to reach more customers and fostering a more competitive environment. This dynamic can promote a healthier marketplace where price competition encourages vendors to improve their offerings, which ultimately benefits consumers with better prices and increased variety of products.