Firms: Types, Mergers & Scale

Microeconomic Decision Makers · 3 question types

Firms can be classified in two ways the syllabus expects you to know.

By sector of production:

Primary-sector firms extract raw materials from nature (farming, fishing, mining, forestry).

Secondary-sector firms turn raw materials into finished or semi-finished goods (manufacturing, construction).

Tertiary-sector firms provide services (retailing, banking, transport, tourism).

The three sectors of production: a primary-sector farmer, a secondary-sector manufacturer and a tertiary-sector service worker — Source: Different Types of Firms by Save My Exams

By ownership:

Private-sector firms are owned by private individuals and usually aim to make a profit (sole traders, partnerships, companies).

Public-sector firms are owned and run by the government, often to provide an important service (state-owned utilities, public transport) rather than purely for profit.