An example of economies of scale in the provision of financial services is
A)investing in a diversified collection of assets.
B)providing depositors with a variety of savings certificates.
C)hiring more support staff so that customers don't have to wait so long for assistance.
D)spreading the cost of writing a standardized contract over many borrowers.

Question

Quizplus · Accepted Answer

Spreading the cost of writing a standardized contract over many borrowers is an example of economies of scale in the provision of financial services. As a financial institution writes more contracts, the cost of each individual contract decreases due to the ability to spread the fixed costs (such as employee salaries and overhead expenses) over a larger number of borrowers.

An Example of Economies of Scale in the Provision of Financial