AbstractThis article reports the results of an empirical study in which a model for equilibrium size of marketing firm in a spatial market is used. This model has received extensive treatment in thisJOURNAL, particularly from a theoretical standpoint. The model is applied to the processing and distribution of packaged fluid milk. Solution of the model results in determination of size of plant associated with minimum average processing and distribution costs. Results of the study indicated that where packaged milk is distributed in semitrailers, in most situations increases in distribution cost as plant size is expanded do not offset decreases in processing cost up to the 134,000 quart per day plant. While total average cost declines within this range of plant sizes, most of the economies of size are realized by the 50,000 quart per day level.