Economies of scale and high capital requirements typically go together. Scale economies occur as average production cost declines with rising output per period. Any new entrant must (1) have available financing to construct a large-scale factory and (2) be able to sell in sufficient quantity to be cost-competitive. Entry may be especially unattractive when the entrant considers the impact of added volume on market price; the increase in supply caused by a new entry may lower product prices, making it more difficult for the new entrant to compete in the market. Scale requirements can deter entry and promote positive net present value projects among existing firms. Economies of scope, in particular, refers to financial institution’s abilities to generate synergistic cost savings through joint use of inputs in producing multiple products.