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- KATIE BELDINGPERIOD: 6
- A sole proprietorship is a business owned and run by more than one person. Also, more than 70% of businesses in the U.S. are sole proprietorships.
- In an economics text book I was interested in the topic of market structres and business organizations. What is a sole proprietorship?
- The sole proprietorship is the company that is the main source of output in that market. It exists because it out performs the other companies in profits. In a perfectly competitive industry, the quality of the same product differs and people compete on the price. The sole proprietor would be responsible for debts and owning the business as a whole.
- How could a sole proprietorship be in a monopolistic competitive industry, or a market in which many companies sell products that are similar but not identical? How about in a perfectly competitive industry, where all companies sell identical products and there are no monopolies?
- A corporation could be a monopoly by controlling supply completely or by buying competing companies in the market through horizontal merging, or becoming the main producer.
- I read and understand that a corporation is a legal entity owned by individual stockholders. I want to know: how a corporation could be a monooly?
- To answer your question, we first have to know the economic definition of both partnership and oligopoly.
- How could there be a partnership in an oligopoly?
- I found in my economics textbook that an oligopoly a market dominated by a few large, profitable firms. Oligopoly looks like an imperfect form of monopoly. Some economists call an industry an oligopoly if the four largest firms produce at least 70 to 80 percent of the output.
- I found out a partnership is a defined as: a business owned by 2 or more people.
- Oligopolies earn their highest profits if they can come together as cartel (an agreement between firms to set prices or production levels), and act like a monopolist by reducing output and raising price. This works best if the oligopoly has a smaller number of firms.
- Knowing the definitions, how would a partnership in an oligopoly work?
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