Circular Flow, Market Structures, and Business Organizations
Terms in this set (45)
A market where every firm produces the same product for about the same price.
Barriers to Entry
Factors that make it difficult for new firms to enter a market
Expenses an owner has to pay before opening a new business (machines, permits, patents, fees).
A market dominated by a single seller and has any number of buyers. Complete barriers to entry.
A market that runs most efficiently when one large firm provides all the the output (utility companies)
an exclusive right to sell a new good or service for a specific time period. A way to create technological monopolies.
A market in which many companies sell products that are similar but not identical. This market contains Low barriers to entry and little control of prices.
a market dominated by a few large firms. The market contains high barriers to entry and firms have some control over pricing with a high level of interdependence.
an agreement among firms to divide the market, set prices, or limit production.
In a perfect competitive market there are no difference between products sold by different suppliers.
Market Entry and Exit
Joining or leaving a Market
A monopoly created by the government
When a company agrees for a fee to let another person or group set up an enterprise that uses the original company's name to sell goods and services from their own location.
Are possible when tech companies are awarded certain patents that allow them sell a new good or provide a new service for a specific time period.
making a product different from similar products
a series of competitive price cuts that lowers the market price below the cost of production.
A formal organization of producers that agree to coordinate prices and production.
An establishment formed to carry on commercial enterprise
authorization to start a corporation issued by the state.
law in a city to town that designates separate areas for residency and for business.
Responsibility for debt or other possible losses.
An item (Items) that are used to secure a loan and protect the lender. Can be a house, land, car
If a business is unable to meet their financial obligations, the owner(s) are personally responsible to pay the debts of the company
The responsibility for debts are restricted to the ownership stake (shares of stock) the business owner owns.
The length of life of a business.
The amount of control over a business including Liability, profits, management, etc.
They are treated like a person and can sue and be sued and must pay taxes like an individual
Represents ownership in a corporation
One piece of Stock(one piece of ownership)
the profits of a corporation split up evenly amongst its Owners
Represent debt to an Investor, but does not represent ownership. Pays out Interest.
A business that is owned and managed by one individual who receives all profits and bears all the losses
Businesses owned by two or more individuals who share profits and responsibilities.
Goods and Services Sold
Productive Resources are bought
Land, Labor, Capital, Entrepreneurs
Payment for Resources
Income from Resources
Goods and Services Bought