Economies of scale
A) in the financial markets does not explain why financial intermediaries developed and have become such an important part of our financial structure.
B) can be used to an advantage by reducing transaction cost.
C) both A and B of the above.
D) neither A nor B of the above.

Question

Quizplus · Accepted Answer

Economies of scale can be utilized to reduce transaction costs, which is an advantage for financial intermediaries. However, it does not explain why financial intermediaries were developed or their importance in the financial structure.

Economies of Scale