where C is the cost per ton for delivering a ton of feed from a mill to a 

 production unit located M miles from the mill. The added cost per ton 

 for each mile (one way) is 4.89 cents, and the fixed cost associated with 

 each ton is $1.25. Figure 8 illustrates this relationship. 



Figure 7. Relationship between Average Cost per Ton and Feed Distributed 

 per Square Mile per Year for Six Firms 



7.00 



6.00 



5.00 



§4.00 



0) 

 Q. 



3.00 



"o 

 Q 



2.00 



1.00 



A through F = firms 



5 10 15 20 25 30 



Tons of feed distributed per square mile per year 



35 



47 



