MGTA01H3 Chapter : Chapter no. 1 & 2
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MGTA01H3 Full Course Notes
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Document Summary
Command: the government has more control over small business in communism rather than socialism. Revenue taxes: progressive (tax the rich) or regressive (tax the poor) Law of: demand (people buy more when prices are lower), supply (business provide more when prices are higher) Intersection of demand curve (price vs demand) and supply curve (price vs supply) is the market/equilibrium price. Private enterprise require: private property rights, freedom of choice, profits, competition. Perfect competition exists when there are many small firms offering similar products and prices are set by supply/demand. Monopolistic competition works when large or small firms makes their prices distinctive enough to have an influence of the price. Most sell at the same price but large companies could sell for little more. Oligopoly occurs when few large firms dominate the market. In natural monopolies like utilities, it is most efficient to have just one supplier. Goals of an ideal economy: growth, stability and full employment.
