Which of the Following Most Accurately States the Function of Middlemen

question 86

Multiple Choice

Which of the following most accurately states the function of middlemen?

• A) Middlemen add to the expense of buyers and sellers without providing any benefit.
• B) Our economy would work just as well without middlemen since they do not expand the availability of physical goods.
• C) Middlemen reduce the number of transactions since they increase the buyer's price and reduce the seller's net revenue.
• D) Middlemen create value by arranging trades and providing information to buyers and sellers.

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Definitions:

Ratio Analysis

A quantitative method of gaining insight into a company's liquidity, operational efficiency, and profitability by comparing financial statement items.

Financial Statements

Official records that outline a company's financial activities and conditions, including the balance sheet, income statement, and cash flow statement.

Firm's Financial Position

The status of a company's assets, liabilities, and equity at a given point in time, as reflected in its financial statements.

Market/Book Ratio

Also known as the price-to-book ratio, it compares a company's market value with its book value, indicating how much investors are paying for each dollar of net assets.