1. Types of Businesses

2. SOLE PROPRIETORSHIPS AND PARTNERSHIPS

3. WHY DO YOU THINK MARY KAY ASH PROVED SO SUCCESSFUL IN HER COSMETICS VENTURE? BECAUSE – Entrepreneurial skills – Innovation in sales techniques and incentives

4. Sole Proprietorships Advantages Easy to open and close Few regulations Freedom and control Owner keeps Profit Disadvantages Limited funds Limited life Unlimited liability

5. Why are sole proprietorships the most common form of business organization in the US? Easy to start up Full control Relative freedom from regulation Ability to leave the business at any time All profits to the sole proprietor

6. Partnerships Advantages Easy to open and close Few regulations Access to resources Joint Decision Making Specialization Disadvantages Potential for conflict Limited life Unlimited liability

7. What do stocks and dividends have to do with corporations? Stocks are sold to people (shareholders) and those shareholders receive a dividend or check at the end of the year containing a percentage of the corporations profits.

8. Corporations Advantages Access to Resources Professional Managers Limited Liability Unlimited Life Disadvantages Start-Up Cost and Effort Heavy Regulation Double Taxation Loss of Control

9. Perfect Competition &Monopolies

10. CHARACTERISTICS OF PERFECT COMPETITION MANY BUYERS & SELLERS Ensures no one controls prices STANDARDIZED PRODUCTS All products are the same WELL-INFORMED BUYERS/SELLERS So they know market prices & other conditions FREEDOM TO ENTER & EXIT MARKET No interference INDEPENDENT BUYERS & SELLERS They do not band together to influence prices

12. CHARACTERISTICS OF A MONOPOLY ONLY ONE SELLER Who controls supply of a product with no close substitutes CONTROL OF PRICES RESTRICTED, REGULATED MARKET Gov’t. regulations or other barriers keep other firms out of the market

13. formal organization of sellers or producers that agree to act together to set prices and limit output CARTEL

14. OPEC: ORGANIZATION OF THE PETROLEUM EXPORTING COUNTRIES Equador Venezuela Nigeria Libya Algeria Iraq Iran Kuwait Saudi Arabia IndonesiaAngola

15. OPEC : Control 2/3’s of the world’s oil Have a sort of monopoly on oil Try to control prices by controlling supply Not always successful in controlling supply because member nations do not want to limit their profits

17. Get a textbook and turn to page 200 and work on the OPEC section. Then continue as far as you can in the packet.

18. In what ways does OPEC act like a monopoly? What will happen to OPEC’s power as new sources of energy are discovered?

19. Monopolistic Competition

20. Oligopoly