ting and call forwarding. A network's economies of scope can also derive from its structure. For example, if a network's products are viewed as connections between pairs of network users, then rather than operating a point-to-point network, traffic can be aggregated in trunk lines with points reached by distribution or feeder lines. By Much of the discussion in this section draws upon Spulber (1995, 2002a). Networks in Telecommunications realizing economies of scale in the trunk lines, the firm achieves economies of scope in the production of multiple connections. Economies of scale and scope exist in practically any industry. For example, in the automobile industry, the unit cost of producing an automobile is lower the more automobiles a manufacturer produces. Producing only a few cars requires making them practically by hand. Producing many cars allows a manufacturer to develop a large plant that benefits from automation as well as specialization and division of labor, as recognized by Adam Smith (1776). Economies of scope also explain why an automobile manufacturer can save costs by producing many types of cars: the company shares the common costs of manufacturing, engineering, and management across multiple product lines. Contrary to the suggestions of some scholars, 11 the presence of cost economies in manufacturing does not prevent markets from allocating goods and services that are produced with economies of scale. Multiple producers can have economies of scale and scope and compete with each other in supplying goods and services. For example, automobile manufacturers compete with each other to sell cars unhin- dered by the presence of cost economies in manufacturing. There is no a priori reason that markets for telecommunications services should differ in any way. Mul- tiple networks can operate with economies of scale and scope and still compete to supply services to customers. Market prices thus continue to be an accurate measure of value. Sufficient scale relative to the size of the market results in a