Question

Describe the need of transportation.

Answer 1

1. Efficient transportation reduces the costs of production and distribution and, thereby, the selling price of a product. A lower price encourages mass consumption.
2. Transportation helps to reduce price inequalities between different regions through the proper adjustment of supply and demand. Equalisation and stabilisation of prices increase consumers' surplus.
3. Transportation makes available goods produced in different countries, thereby increasing variety in consumption. In fact, the means of transport exert a significant influence on the mode of consumption and the quality of consumer products. Transportation helps to improve the standard of living of the masses through more and more diversified consumption.
4. Transportation is required at every step in the process of production and distribution. Raw materials and machinery have to be moved from the source of supply to the centre of production. Finished goods must be carried to the centres of consumption or markets.
5. The level and speed of industrialisation in a country are determined to a great extent by the means of transportation. Transportation makes mass production possible as goods are produced for distant markets, and the scale of output need not be restricted to local needs.
6. Transportation facilitates foreign and internal trade by providing quick and safe means for the movement of goods and people.
7. Transportation facilitates regional specialisation. A region can specialise in the production of those goods for which it is best suited. It can exchange its surplus with other regions for products that it does not produce.