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.
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