Owners and managers have cited three reasons for the creation of large financial firms or universal banks. What are these reasons?
What will be an ideal response?
The first is diversification: their profits do not rely on one line of business. The second is economies of scale: one CEO, one Board of directors, one accounting system can work for the large firm. The third reason is economies of scope: one firm offering n number of goods and services may be able to do so at a lower total cost than n firms offering one product each.
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New technologies may reduce oligopoly power by
a. increasing the minimum efficient scale b. raising barriers to entry c. raising prices and lowering output d. reducing barriers to entry e. reducing the choices available to consumers in the market
Reflecting the theories of Smith, Ricardo, and Heckscher-Ohlin, free trade permits ______, which allows a country to manufacture and export in those areas where they have a comparative advantage
Fill in the blank(s) with the appropriate word(s).
A reduction in a country's saving rate will tend to cause which of the following in the long run?
A. an increase in labor productivity B. an increase in per capita real GDP C. an increase in the standard of living D. a reduction in economic growth
A tax on buyers will ________ the price paid by the consumer and ________ the price received by the seller.
A. increase, decrease B. increase, increase C. decrease, decrease D. decrease, increase