Harvey : hey mom I have a question? what is the sole proprietorship in monopolistic competition. I have been struggling with it, will you help me out?
Christina: monopolistic competition is a market in which many companies sell products that are similar but not identical.
Harvey: oh okay, so like game stop an game X change ?
Harvey: ok i think im starting to get it.
Christina: kinda, imagine Walmart an HEB they carry the same product for the most part but they still have different names an people still go to both stores to get the things they need.
explaining sole proprietorship
Christina: The sole proprietorship is the simplest business form under which one can operate a business. The sole proprietorship is not a legal entity. It simply refers to a person who owns the business and is personally responsible for its debts. A sole proprietorship can operate under the name of its owner or it can do business under a fictitious name.
how corporation could be monopoly
Christina: corporation are known to be associated with monopolies, a single seller market able to set outputs and prices that has lots of power. this is because corporation are big in business and both have lots of power and finds ways to raise prices and make lots of money.
Harvey: OK so the only different between the monopoly and a corporation is one is owed by a group an one by one person.
partnership as an oligopoly
Christina: Oligopoly is a market structure with a small number of firms, none of which can keep the others from having significant influence.now partnership could be an oligopoly because these businesses could partner together to raise prices an make more profit. but, this is something that the government tries to prevent from happening so it wont become a monopoly.so did this conversation help you at all son?
Harvey: OK I actually think I under now.thanks you so much!