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Reasons for engaging in business :

1) To make profit 2) To provide service 3) To become independent 4) To attain self actualization 5) To stay active

Nature of Operations Industry Agriculture Service Commerce

Micro enterprise Cottage Small Medium Large TOTAL ASSETS Up to P150,000 Up to P1.5M Up to P 15M Up to P60M Above P60M NO. OF EMPLOYEES Up to 4 Up to 9 Up to 99 Up to 199 200 and above


1) Single or Sole

2) Partnership

Advantages : 1. Easy to organize 2. The proprietor is the boss 3. The owner all profits from his business Disadvantages : 1. Needs large amount of financial resources 2. Benefits of specialization in business management are not present in small proprietorship 3. The owner has a limited ;iability

Advantages 1.Easy to organize 2. Better management because of the presence of many participants 3. Possibility of bigger resources Disadvantages 1. Conflicts of quarrels between or among partners 2. Lack of Stability 3. The partners are subject to limited liability

A contract where two or more persons bind themselves to contribute money, property or industry to a common fund with the intention of dividing the profits among themselves Advantages 1. Member has a limited liability 2. Has the most effective means of raising money as capital for its operation Has permanent existence Capable of getting the most efficient management Disadvantages 1. It is not easy to organize 2. Abuses of corporation officials are likely to emerge 3. There is a very impersonal or formal relationship between officials and employees

1) Ownership Control a. closed corporation b. public corporation c. government corporation 2) Nationality of stockholders a. Domestic b. Foreign 3) Corporate combinations a. Joint venture b. Merger c. Holdings company



No. of sellers

No. of buyers

Barriers to entry of exit from the industry None

Relative influence over r the price of the product

Pure Competition Monopoly Monopolistic Competition Oligopoly


Many One

Many Many Many Many

Little or no influence; price takers Absolute influence; seller is price maker Strong influence; but usually a price taker Very strong influence; usually a price maker with the others Absolute influence; buyer is price maker Very strong influencebuyer; usually a price maker with the others

Unique Slightly differentiated Slightly differentiated

Very high Low

Many Few

Very high

Monopsony Oligopsony

Usually unique Slightly differentiated



Very high

Few to many


Very high

RA 7394 :The Consumers Act of the Philippines is the policy of the state to protect the interest of the consumer, promote his general welfare and to establish standards of conduct for business industry.
1. The right to basic needs, which guarantee survival, adequate food, clothing, shelter, health care. Education and sanitation to health and life.

2. The right to safety, which is the right to be protected against the marketing of goods or the provision of services that are hazardous to health and life.

3. The right to information, which is the right to be protected against dishonest misleading advertising or labelling and the right to be given the facts and information needed to make an informed choice.

4. The right to choose, which is the right to choose products at competitive prices with an assurance of satisfactory quality

5. The right to representation, which is the right to express consumers interests in making and execution of government price policies. 6. The right to redress, which is the right to be compensated for misrepresentation, shoddy goods or unsatisfactory services.

7. The right to consumer education, which is the right to acquire the knowledge and skills necessary to be an informed customer.

8. The right to a healthy environment, which is the right to live and work in an environment that is neither threatening nor dangerous and, permits a life of dignity and wellbeing.