Question

Beer and Wine:

Consider the location choices of beer brewers and wineries. Most breweries are located close to their customers and far from some inputs (barley, wheat, and hops), while most wineries are located far from customers and close to the key input (grapes). Illustrate the two cases and explain the differences in terms of the monetary weights of inputs and outputs.

Answer 1

Breweries are located close to customers and far from inputs, while wineries are located far from customers and close to inputs.

Step-by-step explanation:

Beer breweries and wineries have different location choices based on their inputs and outputs. Breweries are located close to their customers and far from key inputs like barley, wheat, and hops. This is because the cost of transportation for the final product (beer) is higher compared to the cost of transporting the key inputs. On the other hand, wineries are located far from customers and close to the key input (grapes) because the cost of transporting the grapes is lower compared to the cost of transporting the final product (wine).