However, the effect is not the same for all sizes of firms. The abso- 

 lute and percentage cost reductions become larger as firm size is in- 

 creased. When density is increased from 1,000 to 25,000 pounds, the 

 decrease in unit cost ranges from a low of .609 cents a pound or 43 per- 

 cent for firm A to a high of 1.275 cents or 61 percent for firm D. In- 

 creasing density from 5,000 to 25,000 pounds results in reductions rang- 

 ing from a low of .191 cents a pound or 19 percent for firm A to a high 

 of .500 cents or 34 percent for firm F. 



On an annual basis, the cost reductions from increasing broiler pro- 

 duction density are sizeable. Increasing density from 1,000 to 5,000 

 pounds oilers reductions ranging from $17,000 for firm A to $303,000 for 

 firm D. Increasing density from the 5,000 to 25,000 pound density level 

 results in further reductions ranging from $8,000 for firm A to $138,000 

 for firm D. Firms E and F would experience cost reductions of $239,000 

 and $346,000 respectively. 



Examination of Figure 9 reveals that only the position of firm A 

 changes in relation to the other firms as production density is increased. 

 As density is increased, each firm experiences decreasing unit spatial 

 costs but the rate of decrease is greater for the larger size firms. At an 

 approximate density level of 9,000 pounds per square mile, the unit 

 spatial cost of firm B becomes less than the unit cost of firm A. At approx- 

 imately the 14,000 povind density level, the unit cost of firm C becomes 

 less than the unit cost of firm A. Further increases in density do not 

 cause any further changes in the position of the firms in terms of unit 

 cost. 



Figure 9. Spatial Activities Costs per Pound of Live Broiler Produced at 

 Various Density Levels for Six Firms.i 



2.2 

 2.0 

 1.8 

 1.6 

 1.4 



C 



1 1.0 

 '^ .8 



CD 



5 .6 



4 

 .2 

 



A through F = firms 



5 10 10 20 



Broiler production density' thousonds of poundi per squore mile per year 



25 



^ Spatial Activities: (1) Broiler Assembly, (2) Chick Distribution, (3) Feed Dis- 

 tribution. 



20 



