1. Business Organizations and Competition
Microeconomics
Business Organizations and Competition
Purpose: Discuss the various forms of businesses.

2. I. Goals
Identify the advantages and disadvantages of corporations and franchises.
Describe the three types of corporate mergers.
Provide examples of corporations and franchises.

3. II. Corporations Advantages Disadvantages Limited liability for owners
Ownership is transferrable
Ability to attract new capital (i.e. selling stocks and bonds)
Disadvantages
Most complex form of business organization
Expensive to start up
Subject to double taxation
Larger amount of government regulation

4. II. Corporations Horizontal Merge Vertical Merge Conglomerate
Combining of separate companies that make similar or same products
Ex.: AT&T merging with Cingular
Vertical Merge
Combining of separate companies that are at different stages of production
Ex.: AOL and Time Warner
Conglomerate
Companies that make unrelated products come together under one company title
Ex.: General Electric
Why next wasn’t a failure for Steve Jobs:

5. III. Business Franchises

6. Business Activity
As a small group, brainstorm an idea for a business and answer the following questions.
How can you describe the business…in only one paragraph please?
Supply
What is your product, or service?
Where should you locate the business?
What is your competition?
How much should you charge for the products or service?
How will you split the profits? Who is responsible for the losses?
Demand
Who will buy it?
How can you attract customers?