Q5.      What economies of scale does DBS Bank benefit from integrating with Dao Heng Bank?

(I)               Managerial economies: When the scale is larger, the scope of specialization

  is wider. The larger can make more economical use of management specialists.

 This improves efficiency and reduces average cost. Marketing economies made

            by spreading the high cost of advertising on television and in national

            newspapers, across a large level of output.

(II)           Commercial economies made when buying supplies in bulk and therefore

           gaining a larger discount.

 (III)    Technical economies made in the actual production of the good. For example, large firms can use expensive 

          machinery, intensively. Managerial economies made in the administration of a large firm by splitting up management

          jobs and employing specialist accountants, salesmen, etc. 

(IV)    Financial economies made by borrowing money at lower rates of interest than smaller firms. 

(III)     Research and development economies made when developing new and better products