Econ Lecture 20

Econ Lecture 20 - o Not that many substitutes for beer •...

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Econ Lecture 20  16:06 Section 8- Demand Stable Some brands normal some inferior Market = inelastic brand = elastic Supply Economies of scale millcoorweiser Craft segments: the new entrants Imports: more entry Success= cost control quality image Remarkable entrepreneurs 2008 Recession AbinBev MillerCoors High Concentration but Low BTE Factors that influence demand Demand drivers Tastes o Full array of social forces that effect preferences o Economist – looking at per capita consumption by state Income o Normal good or interior good? o Increasing national income – normal good – shift increases the demand  for good-  inputs will go down o Inferior – shift decreases the demand for good Population Price of other products
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o Incentive industry has to move prices up – demand is inelastic
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Unformatted text preview: o Not that many substitutes for beer. • Price of the product itself Share of a Market – SOM – Share of Stomach – SOS – liquid/food in beverage business try to increase share of stomach – beer consumption in share of stomach lossed 5% since 2000 however, wine and spirits consumption has grew 29% and 21% percent Keeping competition and new entrants atbay • Long Run – the world of theory. o Long Run World of Reality – MillCoorWeiser o LRAC runs wide and tilts up a little why? Firms jum into the market with massive efficient brewing machines And did not have the cost efficiencies to compete with MillCoorWeiser • Network Effects – in beer industries different o 16:06 16:06...
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Econ Lecture 20 - o Not that many substitutes for beer •...

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