Answer: Competition amongst market makers for the ETF

## Explanation A decrease in **competition amongst market makers for the ETF** most likely reduces an ETF's bid-ask spread. ### Key Points: - **Competition among market makers** drives tighter spreads as market makers compete to offer better prices - When there are more market makers competing, they are forced to offer narrower bid-ask spreads to attract order flow - A decrease in competition would allow remaining market makers to widen spreads and increase their profit margins ### Why other options are incorrect: - **Brokerage fees**: These are separate transaction costs that don't directly affect the bid-ask spread - **Daily share volume**: Higher volume typically reduces spreads, so a decrease in volume would likely increase spreads Therefore, reduced competition among market makers allows them to maintain wider spreads, benefiting their profitability at the expense of investors.

Author: LeetQuiz Editorial Team