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Econ 201 Essay

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Sarah Khairunisa
Microeconomics 201
Prof. Barry Kotlove
7 June 2014
Current Microeconomic Events
Tobbaco Companies in Indonesia
Tobacco industries are categorized as oligopolies. Oligopoly, according to McConnell Brue Flyyn’s textbook, is “characterized by multiple firms, one or more of which will produce a significant portion of industry output.” Tobacco had been present in Indonesia since the 1600s. It was brought in to Java Island by Portuguese merchants. At first, Indonesia’s cigarettes were handmade at home. They were rolled and wrapped with cornhusks, but that was a long time ago. The Indonesian tobacco industry today is characterized by the dominance of big three tobacco companies---Gudang Garam, Bentoel, and Sampoerna. These …show more content…

Once their sales come back to normal, using more machines instead of hiring thousands of people will be more effective as it presses down the labor cost. Tobacco companies should invest more in doing research to do a breakthrough invention so they could produce products that are healthier as the anti-cigarettes campaign is showing definite results. With e-cigarettes that states themselves as healthier products, maybe in the future the demand will shift again to e-cigarettes. Only by discovering new things that satisfy the customer’s want and need will the company be successful.

Sarah Khairunisa
Case: African Beer

SABMiller and Diageo are two largest beer producer in Africa. ”SABMiller, if combined with its partnership with France's Castel Group, sells roughly 60% Africa’s beer by volume. Diageo’s also expands its operation successfully that Senator Keg, its supercheap beer, is also now number two most popular beers in Kenya. As these giant brewers monopolized Africa’s beer market, it can be said that the market has an oligopoly market structure, and both pursue identic operations, so the market can be labeled as competitive. The interdependence that is happening between both brewers makes the competition happens. As SABMiller produces Impala that is half price from its previous beer Manica, Diageo produces Senator Keg to balance it. Diageo

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