Economics
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- hey mom i need help understanding the sole proprietorship in Monopolistic competition. could you help?
- hi honey. whats up?
- Monopolistic competition is where companies sell things that are alike but not the same.
- so basically like Walmart or Kroger
- Well imagine the nail salon we go to and then the one that's down the street from there. They have different names but everything is alike. Both places offer the same services some just enjoy one over the other.
- okay I understand.
- Now sole proprietorship is the state where it is owned by one person. It could be in a perfect competitive industry because any business that is created everyone will be competing against eachother with either the same or similar products.
- So the difference between a monopoly and a corporation is that one is owned by one person and the other is owned by a group?
- Corporations are known to be associated with monopolies able to set output and prices that have lots of power.
- Last is partnerships and oligopolies. An Oligopoly is a market made up of a few large producers with some control over pricing. A partnership could be an oligopoly so that they can partner together, but government tries to prevent it so it won't become a monopoly. Do you understand now?
- Yes I do, thank you mom!
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