The argument that interstate banking would allow banks to grow and more fully achieve a reduction in operating costs per unit of output as output increases is based on

Question

Quizplus · Accepted Answer

The argument is based on economies of scale, which suggest that as a firm's output increases, its average costs decrease due to spreading fixed costs over a larger production volume. With interstate banking, banks can grow and expand their operations, which may result in lower average costs per unit of output.

The Argument That Interstate Banking Would Allow Banks to Grow