firms ranging in annual output from 5,434 to 90,577 tons with feed dis- 

 tributed at three density levels, 1.31. 6.55. and 32.73 tons per square 

 mile per year. 



Effect of Density Level 



The total average cost for each of the six firms at each density level 

 is given in Table 22. The volume-cost relationship for each density level 

 is illustrated in Figure 9. 



At the lowest density level, total average cost decreases from $12.33 

 a ton for Firm A to $10.45 for Firm C and increases with further in- 

 creases in size and volume to $11.26 for Firm E. The least-cost size firm 

 at this density. Firm C, is producing 32,609 tons of feed a year and dis- 

 tributing into an area with a radius of 89 miles. This quantity of feed is 

 sufficient to produce the hatching eggs and broilers for a firm processing 

 7.5 million finished live broilers (26.2 million pounds) a year with a 

 plant capacity of 3,600 broilers an hour on a single shift basis. ^ 



Increasing density to the intermediate level results in the average 

 total cost per ton decreasing from $11.03 for Firm A to a low of $7.82 

 for Firm D and increasing with further increases in firm size and output 

 to $7.99 for Firm F. The least-cost size firm at this density. Firm D, pro- 



Table 22. Total Feed Manufacturing and Distribution Cost per Ton 

 for Six Firms with Feed Distributed at Three Density Levels 



Item 



Feed Manufacturing 

 Feed L)i>tribution 



Total 



Firm 



12.33 



10.92 



10.45 



10.75 



11.26 



Feed Manufacturing 8.59 



Feed Di^tribution 2.44 



Total 11.03 



6.55 Ton Density Level 



6.29 5.23 4.68 



2.69 2.83 3.14 



8.98 



8.06 



7.82 



4.30 

 3.57 



7.87 



4.01 

 3.98 



7.99 



32.73 Ton Density Level 



* Figures across are annual volumes in tons. 

 ** Firm F cannot distribute at this density level. 



1 The feed manufacturing and distribution cost for Firm C is equivalent to 1.3 cents 

 a pound of finished live broiler. 



49 



