Business Economics and Market Structure Fundamentals

Economic Agents and Their Roles

Companies: These entities focus on the production and distribution of goods and services, usually in exchange for a benefit or profit. The Public Sector (SP): Its objective is to achieve the greatest prosperity for the whole of society. Consumers: These are families who decide which goods and services to consume to best meet their needs.

Composition of Families and the Workforce

• Employers: Those responsible for organizing and coordinating productive activity to achieve specific objectives.
• Workers: Individuals who contribute their labor to the production process in exchange for a salary.

Key Job Characteristics

• Personal: The work must be performed specifically by the contracted person.
• Voluntary: The relationship must not be forced or obligatory.
• Account of Another: The fruits of the labor belong to the employer (employed by another person).
• Dependent: The worker is subject to the discipline and direction of the employer.
• Paid: The worker receives a salary in exchange for their work.

Annuitants: These are individuals who receive remuneration for production factors, such as obtaining rent.

Business Objectives and Public Administration

Corporate Objectives

Companies aim to maximize profit, establish themselves and grow, create jobs and wealth within their area of influence, and respect the environment.

The Public Sector Structure

• Local Administration: Local corporations with their own budgets and income derived from state and municipal taxes.
• Administrative Autonomy: Entities with specific skills in sectors like education and health.
• Central Administration: Includes public enterprises, social security, and the state level.

Added Value is defined as the price difference between the sale of a good and the cost of the intermediate goods acquired for its production.

Distribution Channels and Methods

Distribution Channels

• Own Channels: The production company sells directly to the customer without intermediaries.
• External Channels: These involve companies whose business is to distribute products. Wholesalers are intermediaries that buy products directly and sell them to other businesses, while Retailers are brokers selling the end product to consumers in small amounts.

Ways to Distribute

Common distribution methods include franchises, teleshopping, street vending, and vending machines.

Classification and Components of a Business

Classes of Business

• By Activity: Primary, secondary, and tertiary sectors.
• By Ownership: Private and public ownership of productive factors.
• By Legal Structure: Individual ownership or a society/corporation.

Core Components of a Company

• Human Element: All people involved with the company.
• Capital Goods: The economic assets that the company possesses.
• Organization: The set of relations, coordination, and communication defined by the company's authority.
• Environment: A company is not isolated; it is developed within a globalized world, influenced by both its general environment and its specific environment.