The following graph shows economies of scale in the beer brewing industry.74

a. What does this graph tell us about the nature of economies of scale in the beer brewing industry?
b. 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?

Transcribed Image Text:

SRAC LRAC 1.5 Output (millions of barrels) 8.0