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Nicholas H


Date added:

November 25, 2012








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3 / 642


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However, if diseconomies prevail, both will be destroyed. In an information – and distribution-intensive industry with high fixed costs such as financial services, there should be an ample potential for scale and scope economies. Economies of scale exist when the average cost decreases in scale over a relevant range as output expands...
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If this occurs, then larger institutions may be more efficient. Some lines of business benefit from scale while others may be hampered by it. Examples of potential gains of scale in banking activity include physical branch distribution network, infrastructure software, and electronic distribution systems...
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