20 lines
721 B
Markdown
20 lines
721 B
Markdown
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# Transportation Cost Differential
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## Definition
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The significant difference in expense between various modes of transportation, particularly between water-carriage and land-carriage. This differential determines which goods can be profitably traded over different distances and thus shapes market extent and specialisation patterns.
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## Source Chapter
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Book I, Chapter 3
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## Context
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Smith provides detailed calculations showing that land-carriage of two hundred tons requires the maintenance of a hundred men for three weeks and four hundred horses, while water-carriage requires only six or eight men and a ship, demonstrating how transportation costs determine market feasibility.
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## Economic Domain
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Exchange
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