Create a new account

It's simple, and free.

Economic Questions With respect to the structur

With respect to the structural changes in the American brewing industry that may be attributed to shifting consumer preferences, increased per capita consumption, and technological change, such changes occurred within the contexts of the economic concepts of economies of scale and marginal productivity. Economies of scale are reductions in per unit costs that are associated with the use of large plants to produce a large volume of output. The technological change in the brewing industry that permitted a 33.3 percent in the bottling rate for cans and a 50 percent increase in the bottling rate for bottles worked very much in favor of largescale producers. The largescale brewers were best positioned to take advantage of the new technology, as they were already producing beer more efficiently than were the midscale and smallscale producers in the industry. Larger breweries would permit the largescale producers to lower longrun average costs and longrun marginal costs. While shortrange costs might increase to reflect the cost of the new technology, the largescale producers would be in a position to sustain these shortterm costs increases until the point where the longterm cost advantages of the economies of scale derived from the new technology would be realized. Shortterm costs would increase in part because of the costs associated with other opportunities forgone because of the decision to invest in the new technology.

Shortrun costs at each output level are the "sum total of fixed costs (a constant) and total variable costs." Unit costs, whether average or marginal, are used for a variety of decisionmaking purposes in business organizations. The shape of the shortrun cost curve is largely determined "by the productivity of the variable input factors."

The effects on longrun unit costs in the brewing industry of the introduction of the new technology are illustrated in Chart 1, which may be found on the follo...

Page 1 of 3 Next >

More on Economic Questions With respect to the structur...

Loading...
APA     MLA     Chicago
Economic Questions With respect to the structur. (1969, December 31). In LotsofEssays.com. Retrieved 08:37, March 29, 2024, from https://www.lotsofessays.com/viewpaper/1700245.html