Microbrewery,
Growing up in house with my father who brewed his own beer, for personal use, not for sale leads me to contemplate the business of microbreweries. In microbreweries there is the strive to reach minimum efficient scale still but not to reach a monopoly status.
To begin with a we will discuss some of the short run costs; for fixed cost we have the rent, payments for equipment, etc. These cost don't change, but the more beer brewed the lower average fixed cost. For the variable costs there is the costs of ingredients, labour, utilities etc. With ingredients the more purchased less payed per unit so it beneficial when able to use a large amount. Labour on the other hand may have costs per hour work driven up by overtime, night shift premiums. Utilities should follow the production output fairly close.
When considering the long run costs, one has to think about how large they plan to be in the future. As being a microbrewery you want to keep your beers elite and special. The goal for me would be to achieve a size that would allow a comfortable economic profit over and above explicit/ implicit costs. Moving up in plant size to supply beer store province wide seems like a comfortable size.
A similar business would be the Alley Kat Brewery in Edmonton Alberta. They have the capacity to brew 2.4 million and are in a third of the liquor stores in Alberta. Some of their strengths are that being there size they still have a good control over quality of ingredients. I personally do enjoy their beer and may pick some up for tonight.
. (2011). Alley Kat Brewery. In . Retrieved June 1, 2012, from http://www.alleykatbeer.com/index.htm.
Thursday 31 May 2012
Wednesday 30 May 2012
Diminishing Returns
Today I'll discuss a debate, here is the link for it http://www.pierrelemieux.org/artdiminish.html
When we look at the war that the government has had against cigarettes there is a few things that come to mind. I agree that the easy gains in getting people to quit have already been had. There are the people that are either to stubborn or lack the will power to ever quit. So in between the people who have quit and the people who wont, there is the target group to work on. My fiance was a smoker for over a decade and for her it was partly that I don't smoke and that she read a book about quitting that was recommended to her.
I don't think enlarging warnings from 20% to 50% coverage will gain you the 150% change in effect on people quitting. Its mostly important to have the warning large enough to read and get its message across. For the issue with taxes on cigarettes we can just keep increasing the costs of the legal cigarettes pushing people to illegal options. There will be the group of people who wont take part in the purchase of smuggled smokes and can no longer afford to smoke and then may quit. We have to asks ourselves, is this the way we want people to quit? Would they return to smoking if the prices were to reverse or if there income was to increase to the point they were able to afford smoking again?
If we are going to get people to quit and stay that way we need to look at something left out of this debate. Linking smoking to overall health and not just "smoking is bad" may help some people. Using government money to help people into sports and recreation could lead them to quit on there own and have other health benefits as a bonus. My fiance also has a e-cig now cause she had a weakness when she was drinking. For those of you who don't know what that is, Google it. Mostly it is a battery powered cigarette that vaporizes a flavored liquid, leaving you the choice on nicotine level and flavor. I'll even admit that I have a few puffs off her e-cig, she chooses ones with zero nicotine and berry, chocolate, etc flavor. This option keeps people hands full and doesn't force them to quit but doesn't have the same negative health affects. In Canada as of right now you can't purchase e-cigs with nicotine due to some law about self administration. So that's an area the government could help out.
To conclude, the demand needs to be addressed for cigarettes not the supply. Also the governments of the world have gone past the point of diminishing returns on many fronts and need to explore some of the other avenues available.
Lemieux, P. (March 19, 2001). Pierre Lemieux. In The Diminishing Returns to Tobacco Legislation. Retrieved May 29, 2012, from http://www.pierrelemieux.org/artdiminish.html.
When we look at the war that the government has had against cigarettes there is a few things that come to mind. I agree that the easy gains in getting people to quit have already been had. There are the people that are either to stubborn or lack the will power to ever quit. So in between the people who have quit and the people who wont, there is the target group to work on. My fiance was a smoker for over a decade and for her it was partly that I don't smoke and that she read a book about quitting that was recommended to her.
I don't think enlarging warnings from 20% to 50% coverage will gain you the 150% change in effect on people quitting. Its mostly important to have the warning large enough to read and get its message across. For the issue with taxes on cigarettes we can just keep increasing the costs of the legal cigarettes pushing people to illegal options. There will be the group of people who wont take part in the purchase of smuggled smokes and can no longer afford to smoke and then may quit. We have to asks ourselves, is this the way we want people to quit? Would they return to smoking if the prices were to reverse or if there income was to increase to the point they were able to afford smoking again?
If we are going to get people to quit and stay that way we need to look at something left out of this debate. Linking smoking to overall health and not just "smoking is bad" may help some people. Using government money to help people into sports and recreation could lead them to quit on there own and have other health benefits as a bonus. My fiance also has a e-cig now cause she had a weakness when she was drinking. For those of you who don't know what that is, Google it. Mostly it is a battery powered cigarette that vaporizes a flavored liquid, leaving you the choice on nicotine level and flavor. I'll even admit that I have a few puffs off her e-cig, she chooses ones with zero nicotine and berry, chocolate, etc flavor. This option keeps people hands full and doesn't force them to quit but doesn't have the same negative health affects. In Canada as of right now you can't purchase e-cigs with nicotine due to some law about self administration. So that's an area the government could help out.
To conclude, the demand needs to be addressed for cigarettes not the supply. Also the governments of the world have gone past the point of diminishing returns on many fronts and need to explore some of the other avenues available.
Lemieux, P. (March 19, 2001). Pierre Lemieux. In The Diminishing Returns to Tobacco Legislation. Retrieved May 29, 2012, from http://www.pierrelemieux.org/artdiminish.html.
Monday 28 May 2012
Elasticity of Tourism in Canada
There are many factors that affect tourism in Canada and I'll talk about a few of them. We have the price of fuel and flights, weather and conditions, and finally decisions made by our government. I feel that the tourism industry in Canada is quite elastic and only small changes can have a significant effect on the industry.
I'm sure we have all passed the German couple in the rented RV driving to slow through the mountain passes. As we know our country has great cities surrounded by fantastic scenery, part of the problem for tourist is the actual amount of scenery/ distance between the cities.This makes the price of fuel to run an RV or even a car a deciding factor on vacations in Canada. At the same time the price of fuel for our cars goes up, the price of flights also rises. We being a part of an oil producing nation it helps drive our economy and inflates our dollar value. All of these things work together against tourism. There are the factors to which we have less control over such as weather and conditions that affect ski hills to house boating. On the other side of the spectrum there is policies of our government. As of this years budget cuts will shorten the seasons for parks Canada and will cut the number full time employees. Right now there are different opinions on how this will affect local economies.
Although Canada has experienced growth in the tourism industry it has also been losing part of its market share. The change in the budget for 2012 shows that the current Canadian government believes that the tourism market is inelastic. This assumption is made apparent by believing that cutting investment in the tourism/ parks will net greater savings than revenue lost. Time will tell how this all plays out.
. (March 29, 2012). Statistics Canada. In National tourism indicators. Retrieved may 26, 2012, from http://www.statcan.gc.ca/daily-quotidien/120329/dq120329b-eng.htm.
Canadian Tourism Commission. (2011). Harnessing innovation and alignment. In 2012-2016 corporate plan summary. Retrieved may 26, 2012, from http://en-corporate.canada.travel/sites/default/files/pdf/Corporate_reports/2012-2016_corporate_plan_summary_feb_7_e.pdf.
Wilson, C. (May 23, 2012). Times Colonist. In Canada is missing the boat on tourism. Retrieved May 26, 2012, from http://www2.canada.com/victoriatimescolonist/news/business/story.html?id=4d160066-8255-4935-b1e2-bf20866cea13.
Payton, L. (April 30, 2012). CBC. In Parks Canada hit by latest federal job cuts. Retrieved May 26, 2012, from http://www.cbc.ca/news/politics/story/2012/04/30/pol-federal-job-cuts-parks-canada-hit.html.
Canadian Tourism Commission. (2008). 2009-2013 strategy. In Seizing the opportunity. Retrieved May 26, 2012, from http://en-corporate.canada.travel/sites/default/files/pdf/strategy_eng_2009-2013_0.pdf.
I'm sure we have all passed the German couple in the rented RV driving to slow through the mountain passes. As we know our country has great cities surrounded by fantastic scenery, part of the problem for tourist is the actual amount of scenery/ distance between the cities.This makes the price of fuel to run an RV or even a car a deciding factor on vacations in Canada. At the same time the price of fuel for our cars goes up, the price of flights also rises. We being a part of an oil producing nation it helps drive our economy and inflates our dollar value. All of these things work together against tourism. There are the factors to which we have less control over such as weather and conditions that affect ski hills to house boating. On the other side of the spectrum there is policies of our government. As of this years budget cuts will shorten the seasons for parks Canada and will cut the number full time employees. Right now there are different opinions on how this will affect local economies.
Although Canada has experienced growth in the tourism industry it has also been losing part of its market share. The change in the budget for 2012 shows that the current Canadian government believes that the tourism market is inelastic. This assumption is made apparent by believing that cutting investment in the tourism/ parks will net greater savings than revenue lost. Time will tell how this all plays out.
. (March 29, 2012). Statistics Canada. In National tourism indicators. Retrieved may 26, 2012, from http://www.statcan.gc.ca/daily-quotidien/120329/dq120329b-eng.htm.
Canadian Tourism Commission. (2011). Harnessing innovation and alignment. In 2012-2016 corporate plan summary. Retrieved may 26, 2012, from http://en-corporate.canada.travel/sites/default/files/pdf/Corporate_reports/2012-2016_corporate_plan_summary_feb_7_e.pdf.
Wilson, C. (May 23, 2012). Times Colonist. In Canada is missing the boat on tourism. Retrieved May 26, 2012, from http://www2.canada.com/victoriatimescolonist/news/business/story.html?id=4d160066-8255-4935-b1e2-bf20866cea13.
Payton, L. (April 30, 2012). CBC. In Parks Canada hit by latest federal job cuts. Retrieved May 26, 2012, from http://www.cbc.ca/news/politics/story/2012/04/30/pol-federal-job-cuts-parks-canada-hit.html.
Canadian Tourism Commission. (2008). 2009-2013 strategy. In Seizing the opportunity. Retrieved May 26, 2012, from http://en-corporate.canada.travel/sites/default/files/pdf/strategy_eng_2009-2013_0.pdf.
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