The larger the diameter of a natural gas pipeline, the lower is the average total cost of transmitting 1,000 cubic feet of gas 1,000 miles. This is an example of one reason for

Question

Quizplus · Accepted Answer

Economies of scale occur when increasing the scale of production leads to a lower cost per unit of output. In this case, using a larger diameter pipeline for natural gas transmission reduces the average total cost of transmitting gas, illustrating economies of scale.

The Larger the Diameter of a Natural Gas Pipeline, the Lower