Because greater quantities of oil can only be produced by using more expensive production methods, the industry is:
a marginal cost industry.
a noncompetitive industry.
an economies of scale industry.
an increasing cost industry.
The correct answer is:
an increasing cost industry.
In an increasing cost industry, as production increases, the costs of production also increase due to factors such as the need for more expensive production methods or resources. This aligns with the statement that greater quantities of oil can only be produced by using more expensive production methods.