VII. Answer the following questions:

1. Is nearly 90 per cent of all business done by corporations? 2. What is a corporation? 3. What is necessary to form a corporation? 4. What does the charter state? 5. Does it specify the number of shares of stock? 6. What may a corporation issue? 7. What does a dividend represent? 8. What is the major advantage of the corporate form of ownership? 9. Do corporations have great capacity for growth and expansion? 10. What disadvantages do corporations face? 11. There is also an extra tax on corporate profits, isn’t there?

VIII. Translate into English:

1. Корпорацiя — це організація, створена з метою одержання прибутку. 2. Для того, щоб створити корпорацiю, необхiдно звернутися за дозволом у той штат, де пiдприємство матиме свою штаб-квартиру. 3. Корпорацiя може випускати та продавати акції. 4. Якщо корпорацiя прибуткова, вона видає пайовикам дивiденди або чек на відповідну частку прибутку корпорацiї. 5. Корпорацiя має більше можливостей для залучення фінансових ресурсів, ніж партнерство. 6. Корпорацiя може пропонувати вищу заробітну плату і в такий спосіб приваблювати тала­новитих менеджерів та спеціалістів.

U N I T 9

MARKETS and MARKET STRUCTURES

Text A

Economists classify markets according to conditions that prevail in them. They ask questions like the following: How many supplies are there? How large are they? Do they have any influence over price? How much competition is there between firms? What kind of economic product is involved? Are all firms in the market selling exactly the same product, or simply similar one? Is it easy or difficult for new firms to enter the market? The answer to these questions helps to determine market structure, or the nature and degree of competition among firms operating in the same market. For example, one market may be highly competitive because a large number of firms produce similar products. Another may be less competitive because of fewer firms, or because the products made by each are different or unique.

In short, markets can be classified according to certain structural characteristics that are shared by most firms in the market. Economists have names for these different market structures: pure competition¹, monopolistic competition², oligopoly, and monopoly.

An important category of economic markets is pure competition. This is a market situation in which there are many independent and well-informed buyers and sellers of exactly the same economic products. Each buyer and seller acts independently. They depend on forces in the market to determine price. If they are not willing to accept this price, they do not have to do business.

To monopolize means to keep something for oneself³. A person who monopolized a conversation, for example, generally is trying to stand out from⁴ everyone else and thus attract attention⁵.

A situation much like this often exists in economic markets. For example, all the conditions of pure competition may be met except that the products for sale are not exactly the same. By making its product a little different, a firm may try to attract more customers and take over the economic market⁶. When this happens, the market situation is called monopolistic competition.

The one thing that separates monopolistic competition from pure competition is product differentiation⁷. The differences among the products may be real, or imaginary. If the seller can differentiate a product, the price may be raised a little above the market price, but not too much.