Question

define

Search costs

Required reserve ratio

Economies of scale

Answer 1

Search Cost: It is basically switch cost which is spent by consumer for researchng product or service. it is ideally a big ticket purchase which deserves the time energy and money spend to get reliable affordable product or service. The research can be internal or external.

Required reserve ratio : It is the minimum amount of reserves maintained by commercial banks. It is basically the cash in hand to be held by bank from the depositor's money. and rest ofdeposites are to e maintained with federal reserves bank.

Economies of scale : it is basically the invstment cost reduced due to increase in prouction. For starting the production, the capitl is required. the cost takes lot of time to be recovered, it happens in longer time. with the increase in production, the per product costdecreaases so that the business can generate profit.