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Business and Market Structures
Transcript of Business and Market Structures
Each partner has their own duties, and profits and assets are divided.
There is split liability, less time, and you can share ideas.
Sometimes though, there are hard decisions that need to be made, and you have to split the profit. Pros
-Single owner of business,
-Owner gets all profits
-Only taxed on profits Type of business organization owned by many, but treated by law as one person.
Corporation must provide stock.
A portion of the companies profits that pare paid out to stockholders is called a dividend. Corporation Sole Proprietorship's Economics of Scale Partnerships Cons
-Totally responsible for business.
-time consuming Franchises The firm sells the right to use its name and sell its products Entrepreneur A person who starts his or his own business and creates new ideas, new products, or a new way of doing something Stock Oligopoly Industry dominated by few suppliers who show some control over price.
-Few buyers and sellers
-Large difficult barriers to entry
-Identical, slightly different products
-Non price competition
-Interdependence Ownership rights to a certain portion of the future profits and assets of the company. Some issue dividends, which are a portion of the profits. Monopolistic Competition Large number of sellers that offer similar but slightly different products, and in which each has some control over price. Perfect Competition Market situation where there are many buyers and sellers, and no single buyer or seller can affect price. Product Differentiation Manufacturers use of minor differences in quality and features to try and differentiate between similar goods and services. Monopoly Merger A single supplier makes up an entire industry for a good or service with no close substitutes. When two or more companies combine together into one. Horizontal Merger Merger involving companies that do the same or very similar things.
Ex: American Airlines and U.S. Airways Non Price Competition Vertical Merger Companies in the same industry but different parts of the industry come together.
Ex: Comcast and NBC Advertising emphasizes minor differences and tries to build customer loyalty. Conglomerate Merger involving unlike companies with no common interest.
Ex: Dairy Queen and Geico Natural Monopoly Low production cost resulting from large size of output. Exclusive rights by the local government that provide services. Geographic Monopoly A regional monopoly. a small town country store is not very big competition and brings in low profits. Technological Monopoly An invention that the government patents for you as protection of your product. Government Monopolies Monopoly is help by the government. Projects conducted by the government, and basic government benefits are examples of government monopoly.