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Show 21 Studies of railroad economies of scale. costs However, generally study a agree that railroads made by Kent T. Healy subject are concluded that diseconomies of scale in respect to overall expenses and investment nificant with railroad firms of In another general support to are sig yet no 19 20,000 or more study George W. Wilson employees. concluded that there is for the belief that railroads are subject as diminishing to returns 20 except under conditions of extremely heavy traffic density. A series of studies University by the concluded that there Transportation are Center at Northwestern economies of scale in trucking operations. The center found: Administrative and insurance costs decline in 1. to increase in 2. Traffic and Expanding 19Kent T. costs (which make costs) decline with increases transportation per cent of total 3. proportion output. up about 50 in output. firms tend to decrease their operating ratio, Movement in Transportation, Healy, "The Merger 52 (May 1962) p Economic Review, , 20Wilson, 21 " American 440. op. cit., p 4:7. See also TransportaEssays on Some Center, "Transportation Mergers and Acquisitions, Proceedings of Con 166. "Early studies made by such econ ference (Evanston, Illinois, 1961), p . , " tion , Ripley and J .M, Clark led to the conclusion that railroads are indus sharply Iall lng costs with increases in volume. The conclusions were that probably no railroad plant in the United States had enough volume to reach the low point on its long-run cost curve. See also the author's discussion in Chapter VI of the effect of economies omists as tries of " of scale on motor carrier consolidations. 210perating ratio is the percentage that total operating expenses revenue. motor The ICC has considered carriers. a 93 per cent operating ratio a are of total fair return for |
