1. Businesses would merge for two reasons 1. The desire for the business to become bigger. 2. Efficiency - Economies of Scale: the cost of production falls as producer grows.

2.  A Horizontal Merger is combining two or more firms that produce the same kind of product or service.  A Vertical Merger is combining firms involved in different steps of manufacturing a good.

3.  Conglomerates – a firm that has at least four businesses, each making unrelated products. GE

4.  Multinational Corporations – a large corporation with branches in several countries. ◦ Multinationals helped developing nations by… which can hurt workers in the U.S.

5.  A Franchise is a business that licenses the right to SELL ITS products in a given area.  A franchisee is when a person buys the rights to sell the parent company’s products.

6. Four types of food franchises:  Fast Food – McDonalds, Burger King, Wendy’s  Pizzerias – Pizza Hut, Dominoes, Papa John’s  Ice Cream – Dairy Queen, Cold Stone…  Coffee – Tim Horton’s, Dunkin’s, Starbucks

8.  An oligopoly is where a few companies control a large portion of a market.  The four largest companies total 40% of a given industry. ◦ Cereal, Cell Service Providers…

9.  If a seller in an oligopoly lowers their prices, other producers in that industry will LOWER PRICES. 

10.  A CARTEL is an organization of COMPANIES and COUNTRIES that agree to act together to set PRICES and limit PRODUCTION.  OPEC  OPEC altogether contributes 40% of the world’s oil production.

11. Nigeria Venezuela Ecuador Angola Libya Algeria Saudi Arabia Iran Qatar UAE Iraq Kuwait Former members include: Gabon Indonesia Gabon

12. 1. Saudi Arabia 2. Iran 3. UAE 4. Iraq 5. Nigeria 6. Kuwait 1. 2. 3. 4. 5. 6. 7. Venezuela 8. Algeria 9. Angola 10. Libya 11. Qatar 12. Ecuador

13.  A COOPERATIVE is a business operated for the shared benefit or the owners, who are also its customers. ◦ Associated Press (News Co-Op) ◦ Sunkist Growers (Farmers Co-Op) ◦ BJ’s (Consumer Co-Op)

14.  Non-Profit Organizations acts like a business organization.  It’s purpose is usually to BENEFIT SOCIETY. ◦ Amnesty International ◦ Red Cross ◦ UNESCO ◦ Salvation Army

15. There are five conditions: 1. MANY BUYERS & SELLERS - no one can dominate 2. STANDARDIZED PRODUCTS - no quality difference 3. INDEPENDENT BUYERS/SELLERS - competition reduces prices

16. 1. 2. 3. 4. WELL INFORMED BUYERS/SELLERS - a weakness* 5. FREEDOM TO ENTER/EXIT THE MARKET - anyone can enter The closest example of perfect competition is FOOD.

17.  Monopolistic competition is different as it: OFFERS SIMILAR BUT NOT STANDARD PRODUCTS.  Four ways monopolistic competition tries to gain business through non-price competition: ◦ Many buyers and sellers ◦ Similar but differentiated products ◦ Limited control of prices ◦ Freedom to enter/exit the market  Uses DIFFERENTIATION to distinguish products.

18.  A monopoly is a MARKET STRUCTURE in which only ONE seller sells a product for which there are no close substitutes.  A monopoly is A PRICE SETTER, RESTRICTS THE MARKET and IS THE ONLY SELLER.

19. Government MonopolyTechnological Monopoly Natural MonopolyGeographic Monopoly TYPES OF MONOPOLIES When the costs of production are lowest if only one firm provides output. i.e. Water Companies When a firm controls a manufacturing method, invention or a type of technology. i.e. Apple® Patents When there are no other producers or sellers within a given region. i.e. Buffalo Sabres When the government either owns and runs the business or authorizes only one producer. i.e. the Post Office