Answer to Question #54927 in Microeconomics for see yin yee

Question #54927
Why do you think the motorcar production exhibits economies of scale but not the trucking (haulage) industry?
Expert's answer
In the motorcar production fixed costs take a large part of total costs. So if we produce more motorcars the same amount of fixed costs is divided by more quantity of production units. As a result cost of one motorcar production becomes less, comparing to cost of previous unit production. In trucking industry opposite situation in cost sharing - variable costs take the main part of total costs. So economies of scale effect is almost absent here.

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