The correct answer is: A. increasing returns.
Indivisibilities in production are factors that prevent a firm from producing a good or service in small quantities. This can be due to the nature of the good or service itself, or to the technology used to produce it. For example, a car manufacturer cannot produce a single car; it must produce a certain number of cars in order to make the production process efficient.
Indivisibilities in production can lead to increasing returns to scale. This means that if a firm doubles its inputs, it will more than double its output. This is because the firm can spread the fixed costs of production over a larger number of units, which lowers the average cost of production.
Decreasing returns to scale occur when a firm doubles its inputs and its output increases by less than double. This is because the firm is no longer able to spread the fixed costs of production over a larger number of units, so the average cost of production increases.
Constant returns to scale occur when a firm doubles its inputs and its output doubles. This means that the firm is able to spread the fixed costs of production over a larger number of units, but the average cost of production remains constant.
Negative returns to scale occur when a firm doubles its inputs and its output decreases. This is because the firm is not able to spread the fixed costs of production over a larger number of units, and the average cost of production increases so much that the firm actually produces less output.