Financial intermediaries' ability to reduce the average cost of collecting information because of their efficient operations allows them to take advantage of
A)asset transformation.
B)economies of scale.
C)economies of scope.
D)transformational trading.
E)standardization.

Question

Quizplus · Accepted Answer

Financial intermediaries can reduce the average cost of collecting information through economies of scale. This means that as they grow and serve more customers, they can spread their fixed costs over a larger base, reducing the average cost per customer. This allows them to take advantage of cost savings and make profits by offering services at a lower cost than if individual consumers were to seek out those services themselves.

Financial Intermediaries' Ability to Reduce the Average Cost of Collecting