sole proprietorship in perfect competition

Skluzavka: 1
How could a sole proprietorship be in a perfectly competitive industry?
if it operates in a market where numerous small businesses sell essentially identical products, with no significant barriers to entry, allowing the sole proprietor to compete on price alone with other firms in the market
Skluzavka: 2
Explain how competition or lack thereof will impact supply and/or demand in this market structure.
In a competitive market, increased competition generally leads to an increase in market supply, causing prices to decrease due to firms needing to lower prices to attract customers, while a lack of competition (like a monopoly) allows a single firm to control supply and potentially raise prices significantly, impacting demand by making the product less accessible to consumers due to higher costs; essentially, more competition means greater pressure on firms to lower prices and increase supply to stay competitive, whereas a lack of competition allows a firm to restrict supply and set higher prices
Skluzavka: 3
What is an advantage or disadvantage of sole proprietorship?
A major advantage of a sole proprietorship is that the owner has complete control over the business, making all decisions and keeping all profits, while a significant disadvantage is unlimited personal liability, meaning the owner is personally responsible for all business debts and legal issues.

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