Doubling the circumference of an oil pipeline more than doubles the volume of oil that can be pumped through.This is an example of
A)production inefficiency
B)diminishing marginal returns
C)diseconomies of scale
D)constant returns to scale
E)economies of scale

Question

Quizplus · Accepted Answer

This scenario describes economies of scale, where increasing the size/scale of the operation leads to lower average costs per unit and higher productivity. Doubling the circumference of the pipeline would result in a greater volume of oil being pumped through, taking advantage of economies of scale.

Doubling the Circumference of an Oil Pipeline More Than Doubles