Theories of microeconomics and their applicationsOrder DescriptionThe top four beer firms- Anheuser- Busch, Miller, Coors, and Stroh’saccountedfor over three-quarters of all beer produced in the United States in1992. Anheuser- Busch alone had 42 percent of the market.1- Do you think that the market for beer in 1992 was is a contestablemarket? Why? [25 Marks]2- In the 1960s, the long-run average cost of producing beer was at aminimum when a firm produced about 2 million barrels per year. Inthe late 1970s, it was at a minimum when a firm’s output was about18 million barrels per year. How would microeconomics explain thisincrease in the cost minimising output? [25 Marks]3-How would this change in the long-run average cost curve havecontributed to the decrease shown below in the number of firms inthe brewing industry? [25 Marks]Year Number of firms Year Number of firms1963 171 1972 1081967 125 1976 494- Which changes in the market have led to the recent growth inmicrobreweries in the United States?
Would this change in structurealter your assessment of the applicability of the contestable marketmodel? [25 Marks]GeneralGuidelinesPlease read all questions and information provided carefully. Answer shouldbe made in appropriate length keeping in view the requirement of eachquestion and total word counts allowed.In addition, your assignment should demonstrate the following qualities:A critical appreciation of relevant literature and its use to supportargument, substantiate calculations and other aspects of the assignment.Evidence of additional personal research, and the ability to analyse materialfrom a variety of appropriate relevant perspectives.Presentation, structure, appropriateness of methodology, breaking intosection headings/subheadings, tidiness.Marks will be awarded for proper referencing and originality of work. Alsonote that plagiarism is a serious offence and your submission will beelectronically checked.Your work must be handed in electronically no later than given date ofsubmission.