The correct answer is: A. Economies of scale.
Economies of scale are a type of economic efficiency that arises when an enterprise’s long-run average costs fall as the scale of its output increases.
In the case of a natural gas pipeline, the larger the diameter of the pipeline, the lower the cost of transmitting gas per unit of distance. This is because the larger the diameter of the pipeline, the lower the frictional losses in the pipeline. As a result, the larger the diameter of the pipeline, the more gas can be transported at a lower cost.
B. Normative economies are not a type of economic efficiency. They are a type of economic policy that is designed to achieve a particular social or economic goal.
C. Diminishing marginal returns is a concept in economics that states that as the amount of one input into a production process is increased, while holding all other inputs constant, the marginal (additional) output will eventually decrease.
D. Increasing marginal product of labor is a concept in economics that states that as the amount of labor used in a production process is increased, while holding all other inputs constant, the marginal (additional) output will eventually increase.