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

A) economies of scale.
B) diminishing returns to scale.
C) diminishing marginal returns.
D) increasing marginal cost.

Economies of Scale

Competitive edge gained by firms through efficient production methods, leading to a reduction in the cost for each unit produced as the scale of production grows.

Natural Gas Pipeline

A system of pipes that transports natural gas from its source to the consumers or to a processing plant.

Diminishing Returns to Scale

A situation where, as more inputs are used, the incremental increase in output decreases.