Question

Explain how the largest beer firms have managed to dominate the beer industry. Does this environment represent pure competition, pure monopoly, monopolistic competition or oligopoly? Explain.

Answer 1

Large beer company have managed to dominate the beer industry because of the economies of scale, these companies have their production in large scale that helps them lower the cost of production and increase the profit, new firms that enter the market are not able to compete them at such lower cost in the market.

This is an oligopoly market as there are few large firms in the market that dominate the large part of the market, their decision making are related i.e. interdependent.