At the time of writing, the top three providers of exchange-traded funds in the United States were Blackrock, Vanguard, and State Street which accounted for almost 80% of the market. Which of the following concepts explains the market concentration?

Question

Quizplus · Accepted Answer

Economies of scale explain the market concentration because as these firms grow larger, they can operate more efficiently, reducing the cost per unit of managing funds, which in turn can attract more investors and increase their market share.

At the Time of Writing, the Top Three Providers of Exchange-Traded