Business Management, 13e
CHAPTER
11
Legal Aspects of Business
11.1 Regulations Maintaining Competition
11.2 Regulations Protecting Business and the
Public
11.3 Business Taxes
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11.1 Regulations Maintaining
Competition
GOALS
● Explain how federal laws help regulate
monopolies.
● Explain how federal laws help promote fair
competition.
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Regulating Monopolies
● Controlling monopolies
● Exists when only one company provides a product
or service without competition from other
companies.
● Natural monopolies
● May be better for consumers than competition
because of the large cost involved in developing or
supplying a product or service.
● Public Utilities , Natural Gas
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Checkpoint
● Describe the reasons that society may want to
allow a natural monopoly?
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Checkpoint
● Describe the reasons that society may want to
allow a natural monopoly?
● Some businesses have very high start up costs.
● Some services are improved when only offered by
one company.
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Promoting Fair Competition
● Sherman Act
● Outlawing business agreements among competitors
that might tend to promote monopolies
● Clayton Act
● Forbids corporations from acquiring ownership rights
in other corporations if the purpose is to create a
monopoly.
● Robinson-Patman Act
● Price discrimination
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Promoting Fair Competition
● Wheeler-Lea Act
● False advertising
● Federal Trade Commission
● Protection from unfair methods of competition
● Other federal agencies
● Providing bankruptcy relief
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Checkpoint
● List the four federal acts that are designed to
promote fair competition?
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Checkpoint
● List the four federal acts that are designed to
promote fair competition?
● Sherman Act
● Clayton Act
● Robinson-Patman Act
● Wheeler-Lea Act
CHAPTER 11
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11.2 Regulations Protecting Business
and the Public
GOALS
● Explain how patent, copyright, and trademark
protection benefits business.
● Describe the ways in which government
regulations protect consumers.
● Describe three methods used by state and
local governments to regulate business.
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Intellectual Property
● Patents
● Sole right, for 20 years, to make, use, sell an
invention or process
● Design Patent (14 years) Utility Patent (20 Years)
● Copyrights
● Author the sole right to reproduce, publish, and
sell literary or artistic work. (Authors life + 70)
● Trademarks (Indefinitely)
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Checkpoint
● Describe the 3 areas of intellectual property
protection?
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Checkpoint
● Describe the 3 areas of intellectual property
protection?
● Patents for physical items and processes
● Copyrights for written or produced work
● Trademark for names, signs, symbols
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Regulations Protecting the Public
● Food and drugs
● Food and Drug Administration (FDA)
● Nonfood products
● Laws require labels on many products if possible
danger exists from product use.
● Information
● Identity theft
● Information liability
● Cookies
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Checkpoint
● Describe the three areas in which government
protects consumers?
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Checkpoint
● Describe the three areas in which government
protects consumers?
● Federal regulations control food and drugs
● Nonfood products
● Information
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State and Local Regulations
● Interstate commerce
● Intrastate commerce
● Licensing
● Public franchising
● Building codes and zoning
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Checkpoint
● List three ways that local government regulate
business?
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Checkpoint
● List three ways that local government regulate
business?
● Licensing
● Building codes
● Zoning
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11.3 Business Taxes
GOALS
● Discuss the nature of taxes and the fairness of
progressive, proportional, and regressive
taxes.
● Identify and explain the most common types
of taxes that affect business.
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General Nature of Taxes
● Reasons for taxes
● Raise revenue to fund new and on going programs
● Regulate business activity
● Fairness of taxation
● Proportional taxation
● Tax rate remains the same
● Progressive taxation (based on ability to pay)
● Regressive taxation
● Decreases as taxable amount increases
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Checkpoint
● Explain the three types of tax policies?
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Checkpoint
● Explain the three types of tax policies?
● Flat tax – everyone pays the same % rate
● Progressive – higher incomes pay a higher %
● Regressive – lower incomes pay a higher
percentage
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Types of Taxes
● Income tax
● FICA taxes
● Sales tax
● Property tax
● Effect of taxes on business decisions
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Checkpoint
● Describe the three most common taxes levied
on businesses and individuals?
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Checkpoint
● Describe the three most common taxes levied
on businesses and individuals?
1. Incomes tax on individual earnings and business
profits
2. Sales tax on retail price of goods and services
3. Property tax on material goods owned.
CHAPTER 11
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