A bank is said to have_____ when its average costs decline when it offers a wider variety of products.
A)economies of scope.
B)economies of scale.
C)cost diminution.
D)decreasing returns to scale.

Question

Quizplus · Accepted Answer

Economies of scope refer to the cost savings that a company can achieve by producing multiple products or services together rather than separately. In this case, the bank is able to offer a wider variety of products and therefore can achieve cost savings through shared resources, such as staff and technology. This is different than economies of scale, which refer to cost savings achieved through producing a larger quantity of the same product.

A Bank Is Said to Have_____ When Its Average Costs