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

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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