The Following Information Is Available on the Average Costs of the Three

Multiple Choice

The following information is available on the average costs of the three major banks in a given local market.Bank A has assets of $10 million and average costs are 15 percent,Bank B has assets of $20 million and average costs of 13 percent while Bank C has assets of $30 million with average costs of 12 percent.Average costs are measured as a proportion of total assets.

By how much should operating costs of the combined entity (Bank A + Bank B) be reduced in order to stay competitive in the local market,ceteris paribus?

A) $900,000.
B) $600,000.
C) $500,000.
D) $400,000.