Transaction cost analyses (TCA) have been considerable researches in both marketing and economic literatures. However, many of these studies have only limited to the general linear demand function and neglected the effect of transaction cost. In this paper, a new type of transaction cost demand function is introduced to two firms' strategy equilibrium. To facilitate their analyses, this work employ a numerical example base on different levels of transaction cost parameters under Nash game. Results of this study indicate that the different levels of transaction cost parameters will affect the marketing decision variables (e.g., sales volume, margin and profit). Discussion of implications for managers, limitations of the study and future research opportunities are then discussed.