Edpuzzle quiz

Edpuzzle #1: Legal Basics and Business Entity Formation

Business Structures Overview

A business becomes real when you legally register its formal structure. Registering provides legal and financial protection, liability separation, and access to necessary licenses, permits, and tax structures.

Types of Business Structures

Sole Proprietorship

• Owned by one person with no legal separation from the business.

• Pros: Simple setup, pass-through taxation (profits go directly to the owner’s personal taxes).

• Cons: Owner is personally liable for debts and lawsuits, limited funding options, and difficulty securing loans.

Partnerships

• General Partnership (GP): Equal personal liability and decision-making among partners.

• Limited Partnership (LP): One partner has unlimited liability, others have limited liability.

• Limited Liability Partnership (LLP): All partners have some liability protection, but less than corporations.

💰 LPs & LLPs require more legal and accounting work, making them costlier than sole proprietorships.

Corporations (C-Corp & B-Corp)

• C-Corp (Corporation)

  • Separate legal entity from owners.

  • Pros: Limited liability, easier funding via public stock sales.

  • Cons: Double taxation (profits taxed at the corporate level and again as personal income for stockholders).

  • Examples: eBay, Airbnb.

• B-Corp (Benefit Corporation)

  • Focuses on social impact alongside profit.

  • Pros: Limited liability, protection for CEOs making social-impact decisions.

  • Cons: Taxed the same as C-Corps.

  • Examples: Patagonia, Ben & Jerry’s.

LLC (Limited Liability Company)

• Hybrid of a corporation and partnership.

• Pros: Liability protection, pass-through taxation, easier for startups.

• Cons: If an owner leaves/joins, the LLC may need to be restructured.

Co-Op (Cooperative Corporation)

• Owned by its members (users/customers).

• Pros: Limited liability, stockholders vote on business decisions.

• Cons: Slower decision-making, harder to get traditional bank loans.

• Examples: REI, farming co-ops.

Nonprofit Corporation

• For charitable, educational, religious, or scientific work.

• Pros: Tax-exempt, eligible for grants.

• Cons: Cannot distribute profits to owners or shareholders.

Key Terms to Remember

• Liability: Legal responsibility for business debts and lawsuits.

• Pass-through taxation: Business profits go directly to owners’ personal income taxes (used by Sole Proprietorships, Partnerships, LLCs).

• Double taxation: Corporations pay taxes on profits before distributing dividends, and stockholders pay taxes again on received income.

• Impact Investing: Investors fund businesses for social/environmental benefits rather than pure profit.

Edpuzzle #2: What are the FOUR Market Structures in Economics?

Use the second link to supplement your understanding of the four market structures

https://corporatefinanceinstitute.com/resources/economics/market-structure/

1. Perfect competition

   1. Imagine you have a vibrant Farmers market where dozens of vendors are selling identical apples

   2. Many buyers and sellers exist, and no single vendor can set the prices

      1. If a single vendor or buyer changes their prices/demand, the market isn’t impacted

   3. This market relies on supply and demand

   4. 3 key features:

      1. Homogeneous products: the products are absolutely identical, theres no differentiation between one vendors products and another

      2. Many buyers and sellers: no buyer or seller can influence the market price

      3. Free entry and exit: firms can easily enter or exit the market and there aren’t really any steep barriers to entry

   5. Real life examples:

      1. Agricultural products: markets for staple crops like wheat or corn

      2. Stock markets: stocks or companies can exhibit characteristics of the perfect competition

      3. Fish markets: have multiple vendors selling the same exact type of fish

2. Monopolistic competition

   1. Imagine a neighborhood filled with coffee shops, each offering unique blends and atmospheres

   2. Key feature:

      1. Differentiated products: each firm offers a product that is slightly different from another firm

      2. Many sellers: numerous firms or sellers exist but they compete based on their brand and their quality because their goods are technically different

      3. Free entry and exit: there are no barriers which mean new firms are allowed to enter the market

   3. Real life examples:

      1. Fast food chains: all serve burgers and similar things, but differentiate through branding and unique branding items

      2. Clothing stores: Gap, H&M, and Old navy all sell clothes but they are unique based on their styles and pricing

      3. Local restaurants: each one offers the same mean like pizza, but have different variations of the product

3. Oligopolies

   1. Imagine an airline industry where just a handful of carriers control most of the market.

   2. A small number of firms dominate, leading to strategic interactions among them when it comes to pricing strategies.

   3. Key features:

      1. Very few sellers: theres only a few dominant firms, so a limited number of companies hold significant market share in an industry.

      2. Interdependence: each firm’s pricing and output decisions depend on their competitors, all must communicate with each other to know the optimal settings

      3. Potential for Collusion: firms may work together to set prices or to limit output so they can keep their margins and profits high

   4. Real life examples:

      1. Airlines: AA, Delta, control the market and respond to their individual pricing

      2. Satellites

4. Monopolies

   1. Imagine your local water utility as the only provider in the area

   2. One company controls the entire market, often due to high barriers of entry that prevent others from entering the market

      1. Barriers: being too expensive, not having proprietary technology or licensing

   3. Key features:

      1. One seller: one firm dominates the market

      2. Unique Product: theres absolutely no close substitutes available in the market

      3. High Barriers to Entry: there’s significant obstacles that prevent competition from being introduces to this monopoly

   4. Real life examples:

      1. utilities

      2. local cable providers: only Comcast available in certain places

      3. Patented products like patented pharmaceuticals

SUMMARY:

1. Perfect Competition

💡 Example: Farmers market with identical apples

🔑 Key Features:

• Homogeneous products (identical, no differentiation)

• Many buyers & sellers (no individual influence on price)

• Free entry & exit (low barriers to entry)📌 Real-life Examples: Agriculture (wheat, corn), Stock markets, Fish markets

2. Monopolistic Competition

💡 Example: Coffee shops with different blends & vibes

🔑 Key Features:

• Differentiated products (branding, quality, uniqueness)

• Many sellers (competition exists, but products vary)

• Free entry & exit (new businesses can enter easily)📌 Real-life Examples: Fast food (McDonald's vs. Wendy’s), Clothing brands (Gap, H&M, Old Navy), Local restaurants

3. Oligopoly

💡 Example: Airline industry (few big players like Delta & American Airlines)

🔑 Key Features:

• Few dominant firms (small number of companies control the market)

• Interdependence (firms must consider competitors’ pricing)

• Potential for collusion (companies may cooperate to control prices)📌 Real-life Examples: Airlines, Satellite providers

4. Monopoly

💡 Example: Local water utility (only one provider in town)

🔑 Key Features:

• One seller (total market control)

• Unique product (no close substitutes)

• High barriers to entry (costs, patents, government regulation prevent competition)📌 Real-life Examples: Utilities (electricity, water), Cable providers (Comcast monopoly in some areas), Patented pharmaceuticals

Edpuzzle #3: The Difference Between Public and Private companies?

use the second link for supplemental information

https://www.investopedia.com/ask/answers/difference-between-publicly-and-privately-held-companies/

Publicly traded company: A corporation whose ownership is dispersed among the general public through shares of stock that are traded through the stock exchange

Private company: owned by a relatively small number of shareholders, typically the company’s founders, management, or a group of private investors, like venture capital firms

• shares aren’t available to the general public and aren’t traded on public exchanges

Difference between the two: how much financial information they are required to disclose

• Public: must register with the SEC, file quarterly earnings reports, and provide other important information to shareholders and the public

  • These regulations are intended to protect the public and help them make informed investing decisions

• Private: aren’t required to disclose financial information until they exceed a certain number of shareholders, then they have to register with the SEC

  • company leadership has more control and is less beholden to shareholders

Initial Public offering (IPO) - the way private companies choose to become publicly traded, public can go back to private

Publicly Traded Company

💡 Definition: A corporation whose ownership is distributed among the general public through shares of stock traded on the stock exchange (e.g., NYSE, Nasdaq).

🔑 Key Features:

• Shares available to the public

• Must disclose financial information (register with the SEC, file quarterly reports)

• Subject to regulations to protect public investors

📌 Example: Apple (AAPL), Amazon (AMZN), Tesla (TSLA)

Private Company

💡 Definition: Owned by a small group of investors (founders, management, venture capital firms). Shares are not publicly traded.

🔑 Key Features:

• Shares are not open to the general public

• Less financial disclosure required unless they exceed a certain number of shareholders

• Leadership has more control without public shareholder influence

📌 Example: SpaceX, Chick-fil-A, Cargill

Key Difference: Financial Disclosure & Regulation

• Public Companies: Must disclose financial reports to the SEC and shareholders.

• Private Companies: Have less regulation, more control over decision-making.

Initial Public Offering (IPO)

💡 Definition: The process by which a private company becomes publicly traded by offering shares on the stock market.

• A company can go from private → public through an IPO.

• A public company can go back to private if bought out by private investors.

📌 Example: Facebook (Meta) went public in 2012 with an IPO.