Interaction between government and business:
• Government as customer
• Government as competitor
• Government as regulator
• Government as taxation agent
• Government as a provider of incentives and financial assistance
• Government as provider of essential services
Private enterprise system:
• Allows individuals to pursue their own interests with minimal government restriction.
o Private property
o Freedom of choice
Degrees of Competition:
• Perfect competition
o Small firms, but large in numbers. Products and services are identical.
o Wheat farmers, Agriculture.
• Monopolistic Competition
o Few sellers, but many buyers. I.e; Coca-Cola and Pepsi, clothing brands.
o Small amount of large sellers. I.e; 4 cereal brands.
o Market only has one