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Cost & Efficiency

88. 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.

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Answer:
D) The rule "the bigger the volume, the lower the cost" is true only up to a point, beyond ...

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Answers a multiple choice question on Cost & Efficiency.

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