TYPE OF COMPANIES 1. 2. 3. A company is a business organization. Liability refers to something like responsibility.

The Companies Act 1965 classifies companies based on: The liability of members The public status The relationship with other companies The place of incorporation Classification by the liability of members: Limited liability o Limited by shares o Limited by guarantee Unlimited company Private company Member limit is 50 Restrict right to transfer share Public company Does not necessarily a government company/body. People can have shares if the company is listed in the stock. Can seek listed status. Group refers to corporations/companies that are related (they have holding subsidiary relationship among themselves). Holding company is the main company Subsidiary company anak syarikat A company is deemed to be holding to a subsidiary company when: When it controls the composition of the board of directors. When it controls half of the voting power of the subsidiary. When it holds more than half of the issued capital. A foreign company is a company, corporation, society, association or other body incorporated outside Malaysia. A foreign company desiring to establish a place of business within Malaysia must become registered. There are three types of business firms namely proprietorship, partnership and corporation. Proprietorship Owned by an individual This individual possesses the ownership right to the firms profit. Is also personally liable for the firms debts. Partnership Unlimited company Owned by two or more individuals Possesses ownership right to the firms profit. Personally liable for the firms debts. Corporation Limited company Owned by shareholders Possesses ownership right to the firms profit. Liability is limited only to their amount of investment in the firm.

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MONOPOLY (THEORY OF A FIRM MARKET STRUCTURE) 1. In monopoly, the firm is the industry. 2. They use the demand curve facing by the firm as the market demand curve. P {The usual demand curve is a reflection of monopolys demand curve.} D Q

3. Total quantity supplied in the market is what the firm decides to produce.
Total revenue

Units of output

4. An increase in output involves not just producing more and selling it, but also reducing the price of its output to sell it. 5. Its marginal revenue curve shows - the change in total revenue as a firm moves along the segment of the demand curve. 6. All firms practice increase output as long as marginal revenue is greater than marginal cost. 7. Marginal revenue (MR) minus marginal cost (MC) equals to marginal profit (if its positive). 8. Profit-maximising level of output for a monopolist is the one where MR=MC (intersection). 9. No supply curve in monopoly. They set price and quantity. 10. Amount of output supply depends on its marginal cost curve and its demand curve. 11. Price is determined based on the profit-max level curve and demand curve. 12. ATC price = Cost PML price = Revenue Profit = PML price ATC price