Discussion
The relation by which plant cost scales with capacity raised to a power near 0.6 is the _____ rule.
Answer: C
Correct answer: six-tenths
The six-tenths rule: \(C_2 = C_1 (Q_2/Q_1)^{0.6}\). The exponent below unity is the economy of scale, and it is the reason large plants have lower capital cost per tonne of capacity than small ones.
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