June, 1938] The Transportation of New Hampshire Milk 19 



Under conditions of perfect competition, uniform rates to producers^ 

 at different distances from the dealer's plant would not be found, (as- 

 suming other conditions to be uniform, producers evenly distributed 

 about a market, equal distances apart, equally good roads, etc.). There 

 are several reasons for this. First of all in considering the behavior of 

 the seller of transportation, the truck operator, the mistake should not 

 be made of assuming that decisions are always based on whether the 

 whole route should be operated or no route at all. Ordinarily, this is. 

 not the decision. Instead, the truck operator decides whether or not 

 it would increase his net returns to take on (or drop off) a particular 

 producer. The price at which transportation is offered, therefore, de- 

 pends on whether or not the operator believes the additional revenue 

 will exceed the additional expense. 



Under conditions of free competition assuming that the distribution 

 01 producers throughout the miikshed is uniform, the operator would 

 offer transportation to a producer, the collecting of whose milk in- 

 volved no extra mileage, at a lower rate than that offered a producer 

 the collecting of whose milk did require the traveling of an additional 

 distance. Under assumptions of uniform distribution of producers in 

 each direction from the plant, this would result in nearby producers be- 

 ing offered lower rates than producers more distant from the plant. 

 An exception would be found in the case where the operator of the 

 truck route had his headquarters at a distance from the plant ; but with 

 a number of trucks operating in that territory, unless all operators 

 lived in the same section of the miikshed, competition would result in 

 the same rate structure as in other parts of the area. 



Turning now to the purchaser of transportation, a similar situation 

 is found. A maximum rate, above which producers will prefer to da 

 without hired transportation and will haul their own milk, will be con- 

 siderably higher at 10 miles from the market than it is at five miles. 

 The existence of the alternative of hauling his own milk or exchanging 

 hauling with neighbors, works in the direction of increasing rates as 

 distance from the market increases, and is particularly active close to 

 the market. 



With both buyer and seller of transportation being affected by dis- 

 tance from market, rates in a perfectly competitive system would tend 

 to increase as distance from market increased, other things being con- 

 stant. 



At first glance, the existence of a rate structure graduated out from 

 the market might be expected to result in truck routes of the same 

 length and volume of milk having different average rates. For in- 

 stance, the route which procured its milk from farms relatively close 

 to market might be expected to have an average rate lower than that 

 which operated directly out from the market. But under the com- 

 petitive conditions which have been assumed, routes traveling the same 

 distance and collecting the same amount of milk from the same num- 

 ber of producers would not be found operating in this manner. In- 

 stead, they would be planned in such a way as to minimize total dis- 

 tance traveled and maximize total returns and so routes of the same 

 length and volume would be expected to have the same average rates. 



