What Factors Explain the Existence of Finance Companies,given That Banks

question 22

Short Answer

What factors explain the existence of finance companies,given that banks already provide loans,credit,and so forth?

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Definitions:

Perfect Competition

A market structure characterized by many buyers and sellers, homogenous products, and the free entry and exit of firms, leading to price takers.

Marginal Product

The additional output generated by employing one more unit of a certain input, such as labor or capital.

VMPL

The Value of Marginal Product of Labor, which is the additional value created by employing one more unit of labor.

Profit-maximizing

The process by which a firm determines the price and output level that generates the most profit.