Econ Unit 3: Business Organization & Market Structures

market
Click the card to flip 👆
1 / 16
Terms in this set (16)
market
a group of buyers and sellers of a particular product.
pure / perfect competition
A market that contains many buyers and sellers all selling identical goods with low barriers to entry. They are price takers with no control over their prices. (ex: bananas, oranges, gasoline)
Image: pure / perfect competition
oligopoly
a market containing a few (2-6) sellers, with high barriers to entry, product is the same (ex: Coke & Pepsi). They have some control over prices.
Image: oligopoly
monopolistic competiton
a market that contains many sellers, selling similar, but not identical products, with low barriers to entry. (ex: fast food hamburgers, jeans, sneakers, etc)
corporation
a legal entity owned by individual stockholders; they have limited liability, are legal entities, and are double taxed
Image: corporation
sole proprietorship
a business owned and managed by a single individual; they are easy to start, have few regulations, but have short lifespans and the owner has unlimited liability.
Image: sole proprietorship
partnership
a business organized owned by two or more persons who agree on a specific division of responsibilities and profits. They are easy to start, have few regulations, have specialization, but have unlimited liability for the partners.
Image: partnership
stock
a certificate of ownership in a corporation
Image: stock
patent
a license that gives the inventor of a new product the exclusive right to sell it for a certain period of time. It's the government's way of rewarding personal innovation and risk-taking.
unlimited liability
the legally bound obligation to pay debts and assume total responsibility, financial and otherwise, of your business
Image: unlimited liability
barrier to entryany factor that makes it difficult for a new business firm to enter a marketnatural monopolya market that runs most efficiently when one large firm supplies all of the output (ex: power company, water company)antitrust lawslaws that encourage competition in the marketplace; used by the government to break up monopoliesderegulationthe removal of some government controls over a marketbonda formal contract to repay borrowed money with interest at fixed intervalsdividendthe portion of corporate profits paid out to stockholders

Flickr Creative Commons Images

Some images used in this set are licensed under the Creative Commons through Flickr.com.
Click to see the original works with their full license.