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As it will be possible for the large money center banks

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Reference no: EM1339800

The answer to Economies of scale

How would you explain the situation below?

You are the owner of a small bank in a state that is considering allowing interstate banking. You do not like this because it will be possible for the large money center banks in Washington, Las Vegas to open branches in your banks geographic market area. While the states' reasoning believes that the benefits to consumers of increased competition, you believe that economies of scale could force you out of business. Explain how economies of scale (if large economies of scale in fact do exist) could force you out of business in the long run?

 

Reference no: EM1339800

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