Forms of Business Organization
A business may be privately owned in three different forms. These forms are: the sole proprietorship, the partnership and the corporation.
The sole proprietorship is the simplest organizational form. There is one owner who makes decisions without consulting anyone. Most private businesses are sole proprietorships. But they account for only small part of all business receipts.
A partnership is an association of two or more partners to carry on business for profit. The advantages of this form are obvious: it can provide a big capital, diversified management, tax benefits from the government. Partnerships have certain disadvantages, too. One is unlimited liability. Other disadvantages are division of profits, disagreements between the partners and difficulty on terminating the business.
A business corporation is an institution established for the purpose of making profit. It is operated by individuals. Their shares of ownership are represented by stock certificates. A person who owns a stock certificate is called a stock-holder. The advantages of this form are the following: 1) the ability to attract financial capital; 2) the possibility to invest the capital in plants, equipment and research, 3) the possibility to offer higher salaries and attract talented managers and specialists.
It is obvious that there are some disadvantages to incorporating. Here are a few of them: 1) initial cost and paperwork 2) double taxation 3) size
Except privately owned business corporations there are some other types too. Educational, religious, charitable institutions are also incorporated. There may be governmental corporations. Such corporations do not issue stock and are nonprofit.
Our Institute
I am a first year student of Chernivtsy Institute of Trade and Economics. It is one of the affiliations of Kyiv National University of Trade and Economics. The university is one of the leading higher educational establishments in Ukraine. A lot of highly-qualified specialists train students for the non-production sphere, that is trade, business (home and international), financial institutions and banks, state administration and authorities, public catering, hotel and tourist complexes, the Customs,etc
Chernivtsy Institute has three faculties (schools): the Economics and Management faculty, the Accounting and Finance faculty, the Entrepreneurship faculty. There is also the faculty of Postgraduate Studies where one can receive a second higher education. Students can study either at the day department as full-time students or at the correspondence department which provides classes for part-time students. The term of studies lasts from 4 to 5 years depending on the subject you major in.
To become a student you must pass entrance examinations or preliminary interview. The tuition at our institute is generally free of charge, but those who study on a contract basis pay for their tuition.
Our institute grants Bachelor, Specialist or Master degree in such fields as international economics, economic cybernetics, marketing, economy of enterprise, accounting and auditing, finance and credit, hotel and tourism management, management of organizations.
Our institute occupies three buildings in the centre of the city. Students have all necessary facilities to study: modern classrooms, laboratories equipped with personal computers. The institute library is well-stocked with text-books, reference literature and periodicals. There is also a reading hall where students can read for their classes. Those who go in for sports can do so in our gymnasium under the guidance of professional coaches. Our students have all opportunities to master foreign languages, carry out research projects and take part in different conferences held at the institute each year. Students that come to our institute from other places have at their disposal a cozy dormitory, where accommodation facilities are provided at reasonable prices.
The teaching staff of the institute do their best to give the students a sound economic education and prepare highly-qualified specialists for the national economy of our country.
MY FUTURE PROFESSION
I am a student of Chernivtsi Institute of Trade and Economics. Our institute offers a variety of courses in many professional areas such as accounting and audit, finance and credit, economics, management, marketing, international trade, economic cybernetics, etc. I study at the daytime department of the faculty of Economics and Management, majoring in economy of enterprises in the market of goods and services. After graduation I shall receive a degree of Master (Bachelor) in this field.
My future profession of economist demands understanding of how economy functions to satisfy the requirements of the people. The better the economy works the higher the people's living standard is. It is the economists who deal with all aspects of economic activity.
Economists decide what, how and for whom to produce. They study the demand for goods and services, identify those which the public demands, produce these goods and services efficiently, and supply them to the market. Economists study the ways of doing business and suggest methods for making more efficient use of employees, equipment, factories and other resources. The aim of economists and their economic activity is to achieve the highest possible level of goods and services production, distribution and consumption. Being entrepreneurs, economists accept responsibility and risk for their business operations and expect to make profits. It is important to stress the role ofentrepreneurs as innovators who develop new products in и markets, or new means of production.
I have chosen the profession of an economist because it offers a lot of opportunities in professional career. There is a wide choice of positions in the job market and I hope to find something interesting for myself.
DEMAND
The issue of demand is an important part of microeconomics. Demand is a consumer's willingness and ability to buy a good or service at a particular time and place. The law of demand describes the relationship between prices and the quantity of goods and services that would be purchased at each price. It says that all else being equal, more items will be sold at a lower price than at a higher price. Generally speaking, demand varies inversely with price, i.e. the quantity demanded will decrease as the price increases, and vice versa.
How much a change in price affects the quantity demanded is described by elasticity. When the demand for an item is inelastic, a change in price will have relatively small effect on the quantity demanded. When the demand for an item is elastic, a small change in price will have a relatively large effect on the quantity demanded.
Elasticity can be measured by the "revenue test". Total revenue is equal to the price multiplied by the number of units sold. If total revenue increases following a price decrease, demand will be elastic. If the price decrease leads to a decrease in total revenue, the demand for the product will be described as inelastic.
The demand for some goods and services will be inelastic for one or more of the following reasons:
• They are necessities.
• It is difficult to find substitutes.
• They are relatively inexpensive.
• It is difficult to delay a purchase.
Demand may be satisfied, and so the actual quantities bought equal demand. On the other hand, some demand might be unsatisfied, and so the actual quantities bought will be less than the buyers are willing to purchase.
The total quantity demanded is referred to as the market demand. Some factors may influence the total market demand for a product:
· the price of a product. Demand is higher at a lower price;
· the price and availability of complementary goods;
· the price and availability of substitute goods;
· the size of the household's income;
· tastes, fashions, attitudes towards a product;
· consumer expectations about future market conditions;
· the distribution of income among the population.
SUPPLY
Just in the same way as demand represents the behaviour of the buyers ill (lie market, supply refers to the behaviour of the sellers. Economists define supply as the quantity of products that sellers will offer for sale at different prices at a particular time and place. The law of supply states that sellers will offer more product at a higher price and less at a lower price. Generally speaking, supply varies directly with price, i.e. the quantity supplied will increase as the price increases, and vice versa.
Economists, usually show the relationship between price and quantity supplied on a graph, with the price variable plotted against the Y-axis and the quantity variable plotted against the X-axis. The supply curve rises from the left to the right and shifts either to the right or to the left when supply changes.
When we plot supply and demand on the same graph, we find that they intersect at a price where the quantity demanded is equal the quantity supplied. This point of intersection is therefore called the equilibrium point or market price, We can predict the behaviour of the market price. If surpluses develop (excess supply), a signal is sent to the sellers to lower the price. If shortages develop (excess demand), a signal is sent to the sellers to increase the price. Eventually supply will again equal demand.
The following factors might affect the quantities supplied:
· Changes in the cost of production. If it costs the producers less produce their products, they will be able to offer more of them for sale. An increase in production costs will have the opposite effect - supply will decrease.
· Other profit opportunities. Most producers can make more than one product. If the price of a product they have not been producing (but could if they choose to) increases, many will shift their output to that product.
· Future expectations. If producers expect prices to increase in the future, they may increase their production now to be in position to profit later. Similarly, if prices are expected to decline in the future, producer may reduce production, and supply will fall.
· Сhanges in technology. Technological developments will raise the quantity of the products supplied.
