ECON101 Lecture Notes - Lecture 16: Monopolistic Competition, Oligopoly, Double Taxation

• School: University of Waterloo
• Department: Economics
• Course: ECON101
• Professor: Wokia Kumase

Document Summary

Econ101-004 lecture 16 firms, markets, concentration measures. Sole proprietorship: firm with a single owner with unlimited liability. Bad decisions made by manager are not subject to review. Owner"s entire wealth is at as owner"s income stake. Partnership: two or more owners have unlimited liability. Cost of capital and labour can be high. Achieving a consensus about managerial decisions is difficult. Corporation: firm owned by one or more limited liability shareholders. Corporation"s profits are taxed independently of shareholder"s incomes. Large scale and low cost capital that is readily available. Lower costs from long-term labour contracts each partner is legally liable for all debts of the partnership. Bad complex management structure may lead to slow and expensive decision making. Double taxation: profits are taxed twice as corporate profit and shareholder income. Perfect competition is the most extreme form of competition and monopoly is the most extreme absence of competition: perfect competition.