Do not submit Word files or multiple files for a single assignment.
- Industry studies often suggest that firms may have long-run average cost curves that show some output range over which there are economies of scale and a wide range of output over which long-run average cost is constant; finally, at very high output, there are diseconomies of scale.
- Draw a representative long-run average cost curve, and indicate the minimum efficient scale.
- Would you expect that firms in an industry like this would all produce about the same level of output? Why?
- The following graph shows economies of scale in the beer brewing industry.
Please see attached document for graph. Replicate the graph on EXCEL then answer the questions
- What does this graph tell us about the nature of economies of scale in the beer brewing
industry?
- What are the particular problems associated with the firm represented by the SATC curve
shown in the graph? Does it represent a firm that would be able to survive over time?