The total cost structure of _____ is similar to _____ as the equipment, rights-of-way, and physical structure have a high fixed cost and a low variable operating cost.
A)motor carriers….air carriers
B)motor carriers….pipelines
C)water carriers….rail carriers
D)pipelines….rail carriers
E)Cannot determine from the above information.

Question

The total cost structure of _____ is similar to _____ as the equipment, rights-of-way, and physical structure have a high fixed cost and a low variable operating cost.
A)motor carriers….air carriers
B)motor carriers….pipelines​
C)water carriers….rail carriers
D)pipelines….rail carriers​
E)Cannot determine from the above information.

Quizplus · Accepted Answer

Pipelines and rail carriers have similar cost structures where the majority of costs are fixed, including the equipment, rights-of-way, and physical structure. The variable cost of operating pipelines and rail carriers is relatively low compared to the fixed costs. The other options, motor carriers and water carriers, have higher variable costs in relation to their fixed costs. Air carriers have high fixed costs but also high variable costs for fuel, maintenance, and crew. Therefore, the most similar cost structure is between pipelines and rail carriers.

The Total Cost Structure of _____ Is Similar to _____

The Total Cost Structure of _ Is Similar to _