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July 10, 2025 

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RISK PREMIUM: This has two very closely related uses. First, it's what risk averse people are willing to pay to avoid a risky situation. For example, if you would be equally happy with a guaranteed $900 or a 50-50 chance of getting either $500 or $1,500, then you're risk premium is $100. Second, it's the extra percentage points added to an interest rate to compensate for the risk of a loan. As a general rule, each 1 percent chance of default on a loan adds a risk premium of about 1 percent to the interest rate.

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MONOPOLY AND DEMAND: The demand for the output produced by a monopoly is THE market demand for the good. This should be compared with the demand facing a perfectly competitive firm. The demand curve for the output produced by a perfectly competitive firm is perfectly elastic, it is horizontal at the going market price. This is what makes a perfectly competitive firm a price taker. It must "take" whatever price is set in the overall market. Facing a downward-sloping demand curve, however, makes a monopoly a price maker. It has a great deal of control over the market and the market price. IT IS THE MARKET!

     See also | monopoly | demand | demand curve | law of demand | perfect competition | price maker | price taker | market control |


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MONOPOLY AND DEMAND, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2025. [Accessed: July 10, 2025].


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PARTNERSHIP

A business that is owned and operated by two or more people. The owners and the business are legally considered one and the same. As such, the owners receive any and all profit, incur any and all loss, and are responsible for any and all debts including those made by a partner. This creates what is termed unlimited liability. In that each partner is responsible for the actions of the others, partnerships tend to be relatively small, with only a handful of people involved. A partnership is one of the three basic forms of business organization. The other two are proprietorship and corporation. This form of business is common for professional-types, like lawyers, accountants, dentists, and physicians.

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Today, you are likely to spend a great deal of time watching the shopping channel seeking to buy either a large, stuffed giraffe or a birthday greeting card for your aunt. Be on the lookout for telephone calls from former employers.
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There were no banks in colonial America before the U.S. Revolutionary War. Anyone seeking a loan did so from another individual.
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