Market Structures Flashcards
a social institution organized informally or organized through the use of legal procedures (productive and distributive purposes)
Business Enterprise
a household small business under sole proprietorship
Micro Enterprise
a business enterprise or agreement between 2 or more people with joint ownership and liabilities of a business (shared responsibilities in liabilities)
Partnership
created under the operation of law fiving emphasis on legal personality (selling stocks and borrowing of banks)
Corporation
capital under the operation is raised from funds generated in the issuance and selling of stocks to the public
Stock Corporation
funded by the non-issuance stocks to the public
Nonstock Corporation
surplus is distributed in terms of dividends to the major shareholders
Corporation for Profit
the surplus goes back to the corporation and are not distributed to its owners (doing some advocacies)
Nonprofit Corporation
is an incentive for businessmen to continue doing business in a particular industry
Profit
is a surplus income that is generated for the efficient and effective management of the business
Profit
can also be considered as the cost of production, compensation for the use of talents of owners and managers
Profit
typical return that resources of the owner would have been earned in other activities
Normal Profit
explicit cost of production since there are monetary outlays in the use of factors of production
Explicit Cost
difference between total revenues and total explicit cost
Accounting Profit
includes both explicit and implicit costs in the use of factors of production; part is the opportunity cost of factor inputs.
Economic Cost
difference between total revenues and total implicit and explicit cost
Economic Profit
the profit that earned by the company that exceeds the normal return
Abnormal Profit
no single buyer or seller has the power to control the market price and quantity
Concept of Competition
no impact in production or purchases
Many Sellers or Buyers
indifferent in the products offered
Selling Homogenous Products
easy to enter, and if it is unfavorable it is easy to exit
Free entry and Free exit Market
the information must be known to all actors in the market
Complete Information
a firm is earning enough profits to cover all its expenses
Break-even
restrictions ib entry arising from intellectual property and government franchises
Legal and Institutional Barriers
