Answer:
economies of scale
Explanation:
Financial intermediaries' ability to reduce the average cost of collecting information because of their efficient operations allows them to take advantage of economies of scale. Let's look what the economies of scale is .
Economics of scale is the decrease in cost as production increases. The increase in production decreases the cost. Thanks to the economics of scale, a trade can be done in a mutually beneficial manner. In addition, economies of scale carry the logic that large economies can be superior. The biggest reason for this is that the more production the enterprise produces in such economies, the lower the cost will be.
Scale economy can be defined as taking advantage of the large scale's cost reduction. By establishing a large capacity for production, this capacity is used effectively and the cost per unit is minimized. Usually, the scale economy occurs when a company meets a significant part of the demand in the market.
Scale Economy Types:
1) In the external-external scale economy, the average cost of a firm decreases when the space it occupies in the industry it is in increases. In other words, in external economies, the cost per output depends on the size of the industry, and in the economies of internal scale, the cost per output depends on the size of the firm.
2) In the internal-internal scale economy, when a firm's own production scale increases, the average cost decreases.
Both external economies of economies and internal economies of scale are largely important for international trade.
Negative scale economy is the opposite of the system operating in scale economy. In short, for the negative scale economy, we can say that the factors included in the scale economy work in the opposite direction. For this reason, costs increase in these economies. The reason for this can be explained by the negative impact of excessive specialization, or the loss of management.
