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An intermediary forms combining funds from huge numbers of savers. Each saver derives Happiness(H) from Income(I) according to the function: H= 31I -I^2 If there is competition between intermediaries, and if the cost of intermediation is $.50 per $100.00 invested, what rate of return would you expect savers to earn after the dust has settled? Explain. Can you measure the benefit to the individual saver--in units of Happiness-- from the existence of intermediaries in this case?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91707215

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