Which of the Following Is Consistent with Economies of Scope

question 108

Multiple Choice

Which of the following is consistent with economies of scope? The subscript "b" refers to a banking firm,"s" for a securities firm,"AC" is average costs and "TC" is total costs.

• A)AC_{b + s} > AC_b + AC_s.
• B)AC_{b + s} = AC_b + AC_s.
• C)AC_{b + s} < AC_b + AC_s.
• D)TC_{b + s} < TC_b + TC_s.

---

Definitions:

Comparative Balance Sheet

A financial statement that presents the financial position of a company at two or more different points in time, allowing for trend analysis.

Financing Activities

Transactions related to raising funds or repaying investors, such as issuing debt or equity, or repaying loans.

Cash Dividend

Cash or stock disbursement from a firm to its owners, typically stemming from the company's profits.

Bonds Payable

Long-term debt instruments issued by corporations or governments, promising to pay the bondholder a specified sum of money at future dates.