At the lowest density level (1.31 tons per square mile), the least-cost 

 operation is a mill manufacturing 32,609 tons a year and distributing 

 into an area with a radius of 89 miles. The total average cost is $10.46 a 

 ton. Increasing density to the 6.55-ton level shifts the least-cost operation 

 to a mill manufacturing 45,287 tons a year and distributing into an area 

 with a radius of 46.9 miles. The total average cost is reduced to $7.82 a 

 ton. Increasing density to the 32.73-ton level shifts the least-cost opera- 

 tion to the largest firm size considered. This mill produces 90,577 tons 

 a year and distributes into an area with a radius of 29.7 miles for a total 

 average cost of $6.23 a ton. Most of the reductions in cost from adjust- 

 ments in mill size and density are a result of lower distribution costs, not 

 economies of size in feed manufacturing. 



At a given density level, there is very little difference in average 

 cost of the combined milling and distribution operations between the 

 large size firms. This situation arises from the fact that as firm size is 

 increased, the economies of size in manufacturing are largely or entirely 

 offset by higher feed distribution costs. 



