Question

How can economies of scale help explain the existence of financial intermediaries?

Answer 1

Answer:

Economies of scale are of two types:

Real economies of scale and

pecuniary economies of scale...Some are external to the firm while others are internal. These help in specialization of labour which helps to increase production in order to reap more profit.. hope it will help you.. and please mark it as brainly

Answer 2

Answer:

Financial intermediaries can take advantage of economies of scale and thus lower transactions costs. For example, mutual funds take advantage of lower commissions because the scale of their purchases is higher than for an individual, while banks’ large scale allows them to keep legal and computing costs per transaction low. Economies of scale, which help financial intermediaries lower transactions costs, explains why financial intermediaries exist and are so important to the economy.

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