The use of intermediaries enables producers to make larger profits because intermediaries:

• A. guarantee that all products will be sold at a fixed price
• B. always purchase goods at prices above market value
• C. help reduce transaction costs and expand market reach
• D. eliminate the need for advertising and marketing

Answer: (C)

Verified step by step guidance

1. Understand the role of intermediaries in a market: intermediaries act as middlemen between producers and consumers, facilitating the exchange of goods and services.
2. Recognize that intermediaries do not guarantee fixed prices or always buy above market value; instead, their main function is to make the buying and selling process more efficient.
3. Identify that intermediaries help reduce transaction costs, which include the time, effort, and resources needed to find buyers or sellers, negotiate prices, and complete sales.
4. Note that by reducing transaction costs, intermediaries enable producers to reach a larger market, increasing the potential customer base and sales volume.
5. Conclude that the increased efficiency and expanded market reach provided by intermediaries allow producers to make larger profits, as they can sell more products at competitive prices with lower costs.