Why do larger diameter myelinated axons have greater conduction velocities than small diameter myelinated axons?
Why should the action potential in Axon B traverse the distance X1 to X2 more quickly than in Axon A?

The larger the diameter of the axon, the less the longitudinal resistance, so the current can propagate along the axon more easily.

Shouldn't the increased capacitance of Axon B (due to its increased diameter) increase the time it takes for the action potential to travel between the two points?

Both, the capacitance and the number of ion channels increase quadratically whit the diameter. So the increase in capacitance is compensated by an increase in total ionic current.

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