If it is true that handling the mail does not get cheaper as the volume of mail increases, which of the following best explains this fact?
A)The Post Office is run by the government and therefore is inefficient.
B)The rule "the bigger the volume, the lower the cost" is true only if other things remain the same; since technological knowledge changes constantly, the cost of handling mail need not fall.
C)Although the rule "the bigger the volume, the lower the cost" is true of most industries, it is not true of all of them.
D)The rule "the bigger the volume, the lower the cost" is true only up to a point, beyond which costs rise.
E)The rule "the bigger the volume, the lower the cost" generally applies only to private industry.

Question

Quizplus · Accepted Answer

The rule "the bigger the volume, the lower the cost" is true only up to a point, beyond which costs rise. This is a concept known as the Law of Diminishing Returns, which means that after a certain level of production, the marginal cost of producing an additional unit of a good or service increases. In the case of handling mail, there are limits to how efficiently the process can be automated or streamlined, and beyond a certain point, additional resources are needed to handle an increasing volume of mail, resulting in higher costs.

If It Is True That Handling the Mail Does Not