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econ sg - Structure of a Corporation[Stockholders(own[Board...

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Structure of a Corporation : [Stockholders (own)] → [Board of Directors (Govern)] → [Management (Runs)] Factors of Production : Sources of Output – [Land (Rent)][Labor (Wages)][Capital (Interest)][Entrep. (Profit)]→ → Producers – (Transforms resources into and services) → Society – (Wants and Needs) Legal Forms of Business: [1)Sole proprietorship (One owner, limited liability) ][2)Partnership (2 owners)] [3)Corporations (Legal entity own by stockholders, unlimited liability)] Net Benefit Maximizing Rules: [1)NB increases when NB > MC][2)NB decreases when MC > MB] [3)NB is maximized MC = MB] Market Structures: [Purely Competitive: Large # sellers, identical products, easy entry] [Monopolistic Comp.: Large # sellers, differentiated product, fairly easy entry] [Oligopoly: Dominated by few large sellers, products are differentiated or identical, entry is difficult] [Monopoly: One seller maintains its position bc entry is impossible] Maximizing Profit : A firm should operate where Marginal Revenue = Marginal Cost Fiscal Policy Summary
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