Consider a bank for which the average cost of lending each taka as a function of the

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Consider a bank for which the average cost of lending each taka as a function of the size of the loan L is:

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The bank lends fifty-five loans of 1,600 taka, fifty-five loans of 1,225 taka, 200 loans of 900 taka, 185 loans of 3,025 taka, and 200 loans of 3,600 taka. The maximum interest rate feasible for the borrowers is 20 percent per year.
Suppose that the bank is a monopoly. Can the bank be self-sustainable?
Compare your answer to the case where the bank is perfectly competitive.

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The Economics Of Microfinance

ISBN: 978-0262513982

2nd Edition

Authors: Beatriz Armendariz ,jonathan Morduch

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