King). If larger, more efficient equipment is employed for
longer hauls then tapering rates would not be surprising.

 A second explanation for tapering rates is price discrimi-
nation (Phlips). In Figure 2, two demand schedules for pickup
and delivery services are shown, DL and DS. The vertical dis-
tance between DL and DS represents the additional costs of
transportation to a more remote point. In other words the
demand for pickup and delivery services is depicted as a demand
derived from the demand for the entire transportation service
(which is assumed to be identical for long and short hauls).
Assuming constant marginal costs (MC) for pickup and delivery
services for long and short hauls, the profit maximizing rates
for pickup and delivery services for long and short hauls are
PL and PS, respectively. As MC is the same for both long and
short hauls, short haul shippers are being charged a higher
premium over costs than are long haul shippers, that is, there
is price discrimination. It should be noted that this explana-
tion rests on some fairly restrictive assumptions concerning
elasticities of demand for transportation services at different
points. Moreover, price discrimination would be difficult or
impossible in an atomistically structured market such as that
for trucking services for produce.

 The final explanation for tapering rates is that such
 rates are similar to volume discounts common for several, if
 not most goods and services. Search and repositioning costs
 between loads may be considerable. Longer trips naturally mean
 fewer searches and repositionings per unit time.


 If tapering rates are discovered in the empirical portion
 of this study, it is felt that the last explanation would be
 the most reasonable. The first explanation is invalid as the
 same type of equipment is normally employed over all distances.
 The second explanation is not feasible considering the competi-
 tive structure of the industry.