Economies of scale enable financial institutions to
A)reduce transactions costs.
B)avoid the asymmetric information problem.
C)avoid adverse selection problems.
D)reduce moral hazard.

Question

Quizplus · Accepted Answer

Economies of scale allow financial institutions to spread their fixed costs over a larger number of transactions, thus reducing the per-unit cost of each transaction. This results in a reduction of transaction costs, enabling financial institutions to offer better prices to their customers while still maintaining their profitability.

Economies of Scale Enable Financial Institutions to