Differentiating Between Market Structures

Topics: Monopoly, Beer, Alcoholic beverage Pages: 4 (1257 words) Published: May 5, 2013
It started in the 1800’s when Germans came to the United States and introduced us to lager beer. Breweries started expanding across the United States providing this new type of beers to its community and its surrounding ones. In the late 1850’s two owners of breweries came together, Eberhard Anheuser and Adolphus Busch. It was soon thereafter that they combined forces and looked at expanding their business across the country with a new American beer. In 1876 they released the beer that all American’s know as Budweiser. Budweiser was a success and the opportunity for Anheuser and Busch to expand their business. To conquer the brewing market in the United States, Anheuser-Busch became the first American brewer to use pasteurization, which allowed them to ship product long distances without spoiling. By the early 1880’s they introduced artificial refrigeration, refrigerated railcars and, rail-side icehouses. 20 years later Michelob was introduced and by 1901, they had hit a million on barrels of beer sold. Many obstacles followed, such as the National Prohibition of Alcohol and The Great Depression but there was nothing that could stop them from becoming the market leaders. In 1957, Anheuser-Busch became the leading United States brewer, a position it retains today ("Anheuser-Busch", 2013). Anheuser-Busch is part of a market in which a few firms exist. It is why Oligopoly was selected as the market structure. Here in the U.S. besides Anheuser-Busch there is a second big firm, MillerCoors. These two industries form most of the beer industry in the U.S. but Anheuser-Busch leads the market. Globally there are other competitors so we will focus on the United States Market only. The reason this market structure was selected for Anheuser-Busch was because there are only a few firms in this market that make up and control the total market output in the U.S. The Perfect Competition market structure is not one that makes sense for Anheuser-Busch. This market...

References: Anheuser-Busch. (2013). Retrieved from http://www.anheuser-busch.com/index.php/our- heritage/history/
Colander, D. C. (2010). Economics (8th ed.). New York, NY: McGraw-Hill.
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