SS1 Second Term Economics Lesson Note – Firms and Industry

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WEEK 2

TOPIC: FIRMS AND INDUSTRY                                                                                 

Content

BUSINESS ORGANISATION

• Definition of firms and industry
• Types and basic features of business enterprises
• General and specific problems of business enterprises

Sub-Topic 1:  Definitions of Firms and Industry

Definitions of firms

A firm may be defined as an independently administered business unit which has the ability and capability of carrying out production, construction or distribution activities. A firm is a unit of industry. Firms may be small or large. Therefore firms are of different sizes, ranging from the one-man business with limited capital to the joint stock company with huge amounts of capital. Examples are the UAC Nigeria Ltd, Ecobank Nig. Ltd, Toyota, Punch Newspaper, Ekene Dili Chukwu Bus Services Ltd etc.

Definition of Industry

An industry may be defined as a group of firms producing broadly similar commodities or offering complementary services. Examples are the shoe industry, vehicle manufacturing industry, banking industry, transport industry, cement industry, entertainment industry etc.

BUSINESS ORGANISATION

Sub-Topic 2:  Types and Basic Features of Business Enterprises

The types of business enterprises include sole-proprietorship, partnership, Joint Stock Companies (private and public), cooperatives, Public Corporations and Joint ventures.

SOLE PROPRIETORSHIP 

The Sole proprietorship is an unincorporated business organization owned by one person, who provides the capital, runs the business and undertakes the risks and profits of the

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