Consider the Following Two FIs: Company a Has $500 Million

Multiple Choice

Consider the following two FIs: Company A has $500 million in total assets and total costs equal to $200 million.Company B has $60 million in total assets and total costs equal to $24 million.

What can you conclude about the cost structure of the market consisting of the two FIs?

A) There are significant economies of scale because both companies A and B coexist in the industry.
B) There are no significant economies of scale because company A is much larger than company B
C) There are no significant economies of scale because the unit costs are constant.
D) There are significant economies of scale because the unit costs decline as size increases.