Same as firm. Very high cost of shirking and political efforts because the competitive check is very slow. E. g. it took 70 years to find out that socialism was uneconomical. The cost of making the law and enforcing it is e. g, courts, police, army, regulating agencies, monetary system. There is huge scope for bribing officials, judges, and politicians, especially in socialist economies.
Many laws are inefficient.
The law of demand and supply determines the price. Parties only capable of making small price adjustment without jeopardizing competitiveness. Economics is predominant although A. Smith notes the trading spirit of human nature. The labor relation is a complex bundle of services bought for a salary set by the employer. Non-economic issues are now important to.