Question

List and discuss the 3 types of firms.

What is market failure?

 List the roles of government.

Why does international trade occur? What is the exchange rate?

Answer 1

3 types of firms

Sole Proprietorship-

The concept of sole proprietorship is a one-person company, hence the term sole, meaning only one.

A sole proprietorship benefit is that all the choices are made by the proprietor. When it comes to choosing the place of the company, who to employ, what to sell, etc., the proprietor is not required to confer with anyone. Another benefit to a sole proprietorship proprietor is that he or she is the recipient of all business-generated revenues. The proprietor is not legally required to share anybody else's earnings.

Partnership

A partnership is a company owned by two or more individuals. Financing is a significant benefit of a partnership. With funding, start-up costs, or continuing company expenditures, each proprietor can assist. The sharing of information and experience is another benefit.

Corporation

Oing establishes the most versatile form of enterprise through the method known as "inclusion." Corporations are chartered by the state and have several legal freedoms. Because the corporation has separate legal status, its owners have restricted liability. In this way, the owners are protected against private legal action if the company is sued. Corporations, however, undergo a lot of scrutiny and are held responsible at a greater level for their actions.

Market failure

Market failure is the financial condition characterized by inefficient free-market allocation of products and services. In market failure, individual rational conduct incentives do not result in rational group results.
In other words, for him or herself, each person makes the right choice, but those prove to be the group's incorrect choices. This can sometimes be shown in traditional microeconomics as a steady-state disequilibrium in which the quantity provided is not equal to the quantity required.

The government can control a market monopoly power by passing restrictive trade laws and anti-monopoly laws. These laws are aimed at eliminating unfair market competition, preventing iniquitous price discrimination and setting rates equivalent to competitive prices.

Through taxation and price regulation, the state can also deescalate all monopoly rates to a competitive level. Authorities can impose a price ceiling to reduce sales monopolies to close or equal to a competitive price. This is usually achieved by setting up a commission which, below the monopoly price, fixes the price of a monopoly goods or service.

The "universe" of prospective customers and vendors will improve considerably when trading globally. Imagine increasing the amount of prospective customers every time you begin selling in a new nation by 100 percent. This is likely to be much simpler than attempting to grow your "home" nation marketplace. The concept that a company depends exclusively on a single market and directs all its funds into a single currency may be more dangerous than it might seem at first. Just look at the amount of unprecedented worldwide "disasters" over the past couple of years (economic meltdown, earthquakes and turmoil in the Middle East) and the dramatic market effects they have had Countries trade with each other when they do not have the funds or the ability to meet their own requirements and desires on their own. Countries can generate a surplus by creating and exploiting their scarce domestic resources, and trade this for the resources they need

An exchange rate is a monetary value of one country versus another nation's or economic zone's currency. How many U.S. dollars do you need to purchase one euro, for instance?

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