Your friend asks you for a loan. You spend several hours doing research on their background (calling their references and such) and spend $40 to run a credit report on them. Because financial institutions like banks service so many loans, they would be able to do the same tasks for a fraction of the time and cost. We said in lecture that this is because financial institutions collude with each other form a monopoly create asymmetric information exhibit economies of scale
Your friend asks you for a loan. You spend several hours doing research on their background (calling their references and such) and spend $40 to run a credit report on them. Because financial institutions like banks service so many loans, they would be able to do the same tasks for a fraction of the time and cost. We said in lecture that this is because financial institutions collude with each other form a monopoly create asymmetric information exhibit economies of scale
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter11: Monopoly And Antitrust Policy
Section: Chapter Questions
Problem 7SCQ: From the graph you drew to answer Exercise 11.6, would you say this transit system is a natural...
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