Econ Test

sole proprietorship

owned and managed by a single person — make up to 70% of U.S. businesses but generate only 5% of all sales

Partnerships

businesses that are co-owned by two or more people

3 types of partnerships

1. General

2. Limited

3. Limited Liability

General Partnership

partners share responsibilities, profits, debt equally

Limited Partnership

At least 1 limited partner who is not involved in running, and is really only to provide funds to receive profit. They are liable for debts

Limited Liability Partnerships

All partners are limited, and not responsible for liabilities of other partners. (business’ with malpractice issue potential)

Corporations

a legal entity separate from its owners, The shareholders or stockholders hold corporations, (apple or microsoft)

Stock

Shares in the corporation/company

Dividends

Part of a corporation’s profit made and paid by stockholders. Cut of the profits paid to stockholders. Owning a share of the company’s profits

Conglomerates

• a company composed of multiple, often unrelated, businesses, typically formed through mergers and acquisitions, where each entity operates independently while remaining under the parent company's financial control

• do a lot of different things : amazon sells music, movies, clothes

Non-Profits

exists to serve a deeper charitable mission

Horizontal Merger

When one company goes with another that makes the same type of good. Two gas stations merging, same industry same product

Vertical Merger

Connects with a company that makes a different product than they do

Unlimited liability

All debts, failures, etc. fall onto the business.

ex. partnership and sole proprietorship

Limited Liability

the personal assets of owners or shareholders are protected from business debts and obligations, meaning they can only lose what they invested in the business, not their personal asset

Limited Life

If the owner dies or stops running, the business will also die with it. The business is dependent on the owner(s).

• sole proprietorship

• partnership

Unlimited Life

Corporations continue to exist even if owners die or change, business operate as before if stockholders change.

Monopolistic Competition

a market structure where many companies sell similar but not identical products

• fast food industries

• hotel chains

Perfect Competition

If price changed no one will really but it cause there are other options

• farmers market

Oligopoly

Only a few producers — fairly limited

• alcohol industry

• car industry

• soda industry

Collusion

Price fixing between companies — cell phone providers agreeing to raise price so there are no price wars, bringing in money and revenue

(genrally illegal)

Monopoly

Naturally occurs because of high cost of production, one company has the large majority of the share in the market

Natural Monopoly

A company has this when the start-up cost is so high that no one else is willing to start this business — naturally happens and people do not get upset by this

• electric companies

Technological Monopoly

When tech is made to produce something, and only they can produce this as no one else is allowed to, which can be harmful to consumers

• eppy pens — patent to be the only ones to make it

Geographic Monopoly

Geographically there are no other producers in the area

• Alaska, no one wants to start anything here because of expenses

Government Monopoly

The industry is and ran by government

• mail system

Baseball

Baseball is the one major sports league that is able to operate as a monopoly. Centered around the idea that baseball isn't interstate commerce. They own all productions of their sport.