Scenario: Suppose that in 2015, a new company called "Corpus Christi Cheer Beer" begins to produce beer to sell to local restaurants.

1.Describe 2 ways in which you would expect a company such as Miller to experience economies of scale that Corpus Christi Cheer Beer does not.(2 points)

2.Describe likely economies of scope for a company such as Miller, relative to Corpus Christi Cheer Beer, in:(1 point each)

1. Services for buyers

1. Purchasing inputs

1. Advertising

1. Employee contracts

3.What types of learning economies would you would expect Miller to have that Corpus Christi Cheer Beer does not? (2 points)

4.Using concepts from Ch. 2, take a position and argue either FOR or AGAINST diversification of Miller if it is thinking about buying a company that sells "beer nuts."(2 points)