<P> Heat losses from industrial processes vary per unit of volume for pipes, tanks and other vessels in a relationship somewhat similar to the square - cube law . </P> <P> Overall costs of capital projects are known to be subject to economies of scale . A crude estimate is that if the capital cost for a given sized piece of equipment is known, changing the size will change the capital cost by the 0.6 power of the capacity ratio (the point six power rule). </P> <P> In estimating capital cost, it typically requires an insignificant amount of labor, and possibly not much more in materials, to install a larger capacity electrical wire or pipe having significantly greater capacity . </P> <P> The cost of a unit of capacity of many types of equipment, such as electric motors, centrifugal pumps, diesel and gasoline engines, decreases as size increases . Also, the efficiency increases with size . </P>

Which of the following is a principal reason that explains why economies of scale