Hey, I have some question about my economics class. What do you know about market structures and business organisations ?
A business organization is an entity aimed at carrying on commercial enterprise by providing goods or services, to meet needs of the consumers. Market structures are the interconnected characteristics of a market.
yes you’re right, I remember that ! A sole proprietorship is a type of entreprise that is owned and run by one person in which there is no legal distinction between the owner and the business entity. A partnership is a formal arrangement in which two or more parties cooperate to manage and operate a business, and corporations are legal entities that are separate and distinct from their owners. Am I right ?
Some examples of business organizations are sole proprietorship, partnership and corporations.
Jacob is coming, maybe he knows about it. Hey Jacob ! do you remember what the different types of market structures we learned about in economics are?
Hey girls ! Yes I remember it’s pretty easy. There are four types of market structures : perfect competition, monopolistic competition, monopoly, and oligopoly. Perfect competition is the situation prevailing in the market in which buyers and sellers are so numerous and well informed that all elements of monopoly are absent and the market price of a commodity is beyond the control of individual buyers and sellers. A monopolistic competition is a type of imperfect competition that many producers sell products and are differentiated from one another, and are not perfect substitutes. A monopoly is characterized by a unique seller, selling a unique product in the market and an oligopoly has a small number of firms, none of which can keep the others from having significant influence.
okay bye Fanny ! I have an other question Jacob, I heard about corporation in a monopoly. Is it a thing ? How does it work ?
That makes sense now, thank you jacob ! Well I have to go, see y’all tomorrow !
Oh okay thank you ! What about monopolies ?
wow, I could not have defined them better than you just did !! But wait, I don’t think I remember what the different types of market structures are.
thank you so much Jacob, this is really helpful ! So, I guess corporations that have a monopoly on a given industry wield a dominating amount of influence and control on the market? When a corporation, that are a bunch of smaller entities gets big enough and gains control over a resource, it becomes a monopoly. The more entities the corporation has, the more power it gets over a resource and the likelihood of it becoming a monopoly increases. Because of that, corporations in monopolies are some of the most powerful businesses. Correct ?
Corporation in Monopoly
Oh yes, I know what you are talking about. To understand corporation in monopoly you first have to understand corporation. A corporation is a company or group of people authorized to act as a single entity and recognized as such in law. They can enter contracts, loan and borrow money, sue and be sued, hire employees, own assets and play taxes.
as I said earlier a monopoly is characterized by a unique seller, selling a unique product in the market. Monopolies have exclusive control of supply.
Yes, you got it ! I’m glad I was able to help you !