7-102 Economies of scale refer to an FI's ability to

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Economies of scale refer to the cost advantages that an FI can achieve by expanding its operations and producing financial services in larger quantities. This allows the FI to spread its fixed costs over a larger output, resulting in a lower average cost of production. By achieving economies of scale, the FI can offer financial services at a lower cost to its customers while maintaining profitability.

7-102 Economies of Scale Refer to an FI's Ability to