In the transport case, scale economies are related with the convenience or inconvenience of
expanding proportionally the flows in all OD pairs, while economies of scope are related
with the potential advantages or disadvantages of serving all OD pairs with one firm (for a
full explanation of the concepts of spatial scale and scope, see Jara-Díaz, 2000). Examining
the different conditional cost functions derived in the previous sections, we can observe that
the choice of a route structure will be invariant to proportional expansions of flows, i.e. the
cost minimizing route structure will be the same5. It is quite simple to show that for all the
conditional cost functions (including that of the two nodes system) the degree of economies
of scale S is given by the ratio between C(Y) and C(Y) – C0. Then C0 = 0 implies constant
returns and C0 > 0 generates increasing returns.