Doubling the circumference of an oil pipeline more than doubles the volume of oil that can be pumped through.This strategy is chosen only by large firms because it results in _____
A)production inefficiency.
B)diminishing marginal returns.
C)diseconomies of scale.
D)constant returns to scale.
E)economies of scale.

Question

Quizplus · Accepted Answer

Doubling the circumference of an oil pipeline results in economies of scale, as it increases the volume of oil that can be pumped through without a proportional increase in cost. This strategy is usually preferred by large firms because they have the resources to invest in the necessary infrastructure and equipment to implement it effectively.

Doubling the Circumference of an Oil Pipeline More Than Doubles