Forms of Business
Publicly Traded
publicly traded- shares are available to anyone to buy
Predatory Pricing
-a predator is a hunter trying to kill their prey
-a predatory pricing sets prices artificially low and attempts to drive away competitors
-then rise prices later
Cartel
group that forms in order to collide
Liabilities
Assets
Price Elasticity and Inelasticity
refers to how sensitive a products demand is to change in price, a product is price elastic if the price has a large impact on demand
refers to how sensitive a products demand is to change in price, a product is price elastic if the price has a large impact on demand
Privately Held
privately held- shares owned by people chosen by corp
Premium Pricing
-sets artificially high
-gives customers the impression that your products are the best
Collusion
competitors agree to not compete for mutual benefit
-price fixing
-wage fixing
Assets
things of value to your company or your own
Rational Consumer
behaves in a logical predictable manner
-acts to maximize their economic self interest
Sole Proprietorship
+you make all the profit
+you're in charge
-you take the downfall
-nobody to share ideas with
Loss Leader
-sell selected product at a loss
-loss leaders bring people to your storewhere they buy other high profit margin products
-usually perishable items
~cant stock up
Competitive Market
an industry or market with many producers who compete with many customers
Bankruptcy
a condition involving a person, business, or government that is unable to repay outstanding debts
Economic
both concerned for themselves
seller wants the highest price and the buyer wants the lowest price
Partnership
+bounce ideas off of each other
+share blame/downfall
-be told what to do
-share profit
Creaming or Skimming
-selling product at an artificially high price
-sacrifice sales volume for high price
-early stages of product eventually need to lower price for more sales
Monopoly
an industry or market dominated by one producer or seller
Chapter Seven Bankruptcy
liquidation
-this involves the appointment of a trustee who collect the non-exempt property of debtor, sells it and redistributes the proceeds to the creditors
Market Share
the percent of a industries total sales earned by a particular company over a specific time period
Corporation
a business owned by shareholders
-corp sells shares and shareholders buy and then own shares of stock
-therefore corp gives up some ownership and decision making
-gets corp money
-legally separate from it's owners
-shareholders are not responsible for corp debt or actions
-shareholders are entitled to shares of the corps profit
Penetration Pricing
the price of a product is initially set at a lower price then the eventual market price to attract new costumers
-grand opening sales
-free samples
-goal is to win market share then raise prices
risk: customers expect sales prices to be the everday prices
Oligopoly
an industry dominated by a few producers or sellers
oligopoly more likely leads to cartels and collusions
Chapter Eleven Bankruptcy
reorganization
-business is aloud to stay open
-mainly used by corps
-trustee negotiates more favorable terms with creditors
*reduced loan amounts
*reduced interest rate
*longer time to pay off rent
*lower wages for employees
Supply Demand Chart
draw it