The following graph shows the economies of scale in the beer brewing industries.
ID: 1183281 • Letter: T
Question
The following graph shows the economies of scale in the beer brewing industries. where LRAC is long run average cost and SRAC is short run average cost. a. What does the graph say about the nature of economies of scale in the beer industry? b. What are the particular problems associated with the firm represented by the SRAC curve shown in the graph? Does it represent a firm that would be able to survive over time?
The picture of the graph will not upload
cost is on the y axis and output is on the x axis SRAC starts at about(1,11) comes down to about (3,8.5) and goes back up to about (4.5,9.5)
LRAC starts at about (.75,11). starts dropping to (.75, 8) goes to the right to its lowest point at about (7,5.5) and goes to the right barely going up to (8,5.75)
hope that helps without a graph...
Explanation / Answer
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