Joint stock company is a voluntary association of individuals for profit, having a capital divided into transferable shares, the ownership of which is the condition of membership.
The definition of a joint stock company highlights the following features of a company.
Separate legal entity:From the day of its incorporation, a company acquires an identity, distinct from its members. Its assets and liabilities are separate from those of its owners. The law does not recognise the business and owners to be one and the same.
The management and control of the affairs of the company is undertaken by the Board of Directors, which appoints the top management officials for running the business. The directors hold a position of immense significance as they are directly accountable to the shareholders for the working of the company. The shareholders, however, do not have the right to be involved in the day-to-day running of the business. The liability of the members is limited to the extent of the capital contributed by them in a company
The risk of losses in a company is borne by all the shareholders. This is unlike the case of sole proprietorship or partnership firm where one or few persons respectively bear the losses.
Although demand curves are typically downward sloping to reflect that consumers? utility for a good diminishes with increased consumption, firm supply curves are generally upward sloping.The upward sloping character reflects that firms will be willing to increase production in response to a higher market price because the higher price may make additional production profitable.
Although demand curves are typically downward sloping to reflect that consumers? utility for a good diminishes with increased consumption, firm supply curves are generally upward sloping.The upward sloping character reflects that firms will be willing to increase production in response to a higher market price because the higher price may make additional production profitable.
Monopolistic competition is a type of imperfect competition such that many producers sell products that are differentiated from one another (e.g. by branding or quality) and hence are not perfect substitutes.
In other words, large sellers selling the products that are similar, but not identical and compete with each other on other factors besides price.
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