In a simple economy of five producers and five consumers, there would be ____ transactions possible without an intermediary and ____ transactions possible with one intermediary.

Question

Quizplus · Accepted Answer

Without an intermediary, each of the five producers can transact with each of the five consumers, resulting in 5*5 = 25 possible transactions. With one intermediary, there are 5 transactions possible from producers to the intermediary and 5 transactions from the intermediary to consumers, totaling 10 transactions.

In a Simple Economy of Five Producers and Five Consumers