11.46 If producers (providers) of goods (services) are able to reduce the unit cost of their goods (services)

by increasing the scale of their operation, they are the beneficiaries of an economic force known as economies of scale. Economies of scale cause a firm’s long-run average costs to decline (Ferguson and Maurice, Econom-ics Analysis, 1971). The question of whether economies of scale, diseconomies of scale, or neither (i.e., constant economies of scale) exist in the U.S. motor-freight common carrier industry has been debated for years. In an effort to settle the debate within a specific subsection of the trucking industry, T. Sugrue, M. Ledford, and W. Glaskowsky (Transportation Journal, 1982, pp. 27–41) used regression analysis to model the relationship between each of a number of profitability/cost measures and the size of the operation. In one case, they modeled expense per vehicle mile as a function of the firm’s total revenue X. In another case, they modeled expense per ton mile Y2 as a function of X. Data