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Why falling prices for craft beers are squeezing firms out of the industry

Graham Watson

5th June 2023

This is a fascinating, and potentially complex chance for students to look at costs and revenues in the craft brewing sector, with an increased supply of beer, and increasingly cost-sensitive consumers seemingly driving down the price of craft beer and driving some small craft brewers out of business.

However, isn't this just about the efficient operation of markets, and efficient resource allocation. If a craft brewer produces a premium product, they will be able to charge a premium price. That said, their small-scale is likely to mean a higher price for their beer than mass produced beers. It's also a chance to reflect on shutdown points and so on.

Please read: Rise in UK breweries going bust amid thirst for cheaper craft beers

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to tutor2u, reads voraciously and is interested in all aspects of Teaching and Learning.

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