3.1.1 - Sizes and types of firms

• What does firm size refer to?

  Scale of operations and output
• How are small firms typically measured?

  By factors such as revenue, number of employees, or market share
• What are the characteristics of small firms?


  Limited products and fewer resources
• What advantages do small firms have?


  Flexibility and closer customer relationships
• What defines medium firms?


  Balanced operations and customer relations with moderate scale of operations
• What are the characteristics of large firms?

  Substantial resources, economies of scale, and wide market influence
• What are public sector firms focused on?


  Providing public goods and services
• How do private sector firms operate?


  They are privately owned and profit-driven, common in competitive markets
• What is a sole trader?


  Owned by one person with full control and responsibility
• What is a partnership?


  Owned by two or more owners who share profits and responsibilities
• What defines a corporation?


  A separate legal entity where shareholders have limited liability for debts
• What are the classifications of firms based on size and type?

  • Sole Trader
  • Partnership
  • Corporation
  • Public Sector Firms
  • Private Sector Firms
• What are the advantages and challenges of different types of firms?

  Advantages:

  • Sole Traders: Full control
  • Partnerships: Shared responsibilities
  • Corporations: Limited liability

  
  

  Challenges:

  • Small Firms: Limited resources
  • Medium Firms: Balancing operations
  • Large Firms: Managing substantial resources
• Why is it important to classify firms by size and type?


  To understand their operational scope and market interactions