Monopolies Dbq

After the Civil war, large businesses ruled America. Prior to the industrial revolution, the government upheld a hands-off approach towards business. Under the laissez-faire principle, free, unregulated markets led to competition, yet this system suffered under the wrath of growing corporations. The impact of big business on the economy and politics was immense during 1870 to 1899. Corporations were growing significantly in number and size, which had a domineering affect on American economy and defined American life.

One of the examples of a monopoly that I will discuss is satellite radio. Sirius and XM radio combine making them the only provider of satellite radio in North America. Even though the FCC is in charge of regulating condition set by the satellite radio provided to the consumer. Since the two provider have combine, they have exclusion rights to the satellite streams here in North America. However, it could have been a lot worse. The FCC regulations made it possible for other radio company to build radio for Sirius/XM radio. Just imagine if you not only had to pay for satellite radio but buy the unit that was only provided by Sirius/XM. It would be a monopoly not only on the stream but also on the physical radio

This law forced the railroads to report to the federal government before making important decisions like how much to charge customers. The railroad companies were outraged and used the defense that their monopolies were almost automatically formed, but there was nothing they could do since the law was federal. (Moritz 19-24, 28)

From 1865 to 1900 the federal government ignored a lot of economic affairs (also known as Laissez-faire) simply because they could and it made running the government much easier. This became a big issue when: railroad land grants, control of interstate commerce, and antitrust activities began to become very competitive in the market place. You may wonder what laissez-faire is; the dictionary definition is the theory or system of government that upholds the autonomous character of the economic order, believing that government should intervene as little as possible in the direction of economic affairs. This is the reason why larger companies could buy out smaller companies and raise the price of the product because they owned everything so to a large extent the government play a large part in the violation of laissez-faire.

In the years following the Civil War, railroads had become the primary form of transportation for both people and goods. They were privately owned and entirely unregulated which gave them a natural monopoly in the areas that only they serviced. Monopolies are normally viewed harmful as they obstruct the free competition that determines the price and quality of products and services offered. The railroad monopolies had the power to set prices, exclude competitors, and control the market in several geographic areas. There was competition among railroads for long-haul routes but there was none for the short haul runs. This allowed the railroads to discriminate in the prices by charging a higher price per mile for short hauls than long hauls. They also discriminated in the prices they charged to passengers and shippers in different localities by providing rebates to large shippers or buyers. These practices caused problems to the American farmers who lacked the shipment volume necessary to obtain more favorable rates. The prices charged and the practices adopted by the railroad services greatly influenced individuals and businesses. Railroads also banded

Finally is the allowance of these monopolies to rise in the first place. Since there were no regulatory agencies back in the second industrial revolution, big businessmen with the idea of trimming fat in their companies could conquer any competitor by using hardball tactics of purposely

Along with promoting industry comes regulation. With railroads becoming more and more prevalent, problems were sure to ensue. Congress enacted laws to protect farmers and small business owners from the activities of railroads. Many people were frustrated with the big businesses taking advantage of workers and consumers. The laws that Congress passed were ones that ensured safety and fair prices in the economy. The Granger Movement would be a case in point. The farmers that were involved in this movement wanted the federal government to take action and regulate the railroad companies from charging unfair rates and carrying out their monopolistic powers in transportation. As a result, the Interstate Commerce Act was passed by Congress and the ICC was formed to regulate the railroads and their prices.

During the building of the Transcontinental Railroad, the railroads themselves created a large market for the steel and iron industries.4 The steel and oil industries were booming and corruption was rampant. Andrew Carnegie had cornered the market in the steel industry and John D. Rockefeller had cornered the oil market. Rockefeller bought up his competition after essentially putting them out of business by flooding the market with refined oil bringing down prices and profits. He was determined to pay no one a profit because he wanted it all for himself. He created a plan called vertical integration which consolidated his businesses into one by creating The Standard Oil Trust.5 These two men became known as barons and got rich beyond belief. In 1890, the Government enacted the Sherman Anti-Trust Act to prevent large firms from controlling one single industry and finally put a stop to these monopolies and trusts, 6 but it was not rigorously enforced until the 1900’s. This act was designed to restore competition and

The government also enacted the Hepburn Act, which made shipping internationally difficult on the railroad. Despite the fact that government grants led to incompetent railroads, the Interstate Commerce Commission and Hepburn Act were put into place, which made it so Hill “could not offer rate discounts on exports traveling on the Great Northern en route to the Orient” which was helping improve the economy with increased trade. Hill and other market entrepreneurs were not corrupt or unfair when choosing to not have subsides, but rather the political entrepreneurs were corrupt and insolvent. Also, Folsom argues that John D. Rockefeller was negatively impacted by government intervention. The Sherman Act was intended “to prevent monopolies and those companies ‘in restraint of trade’. Yet Standard Oil had no monopoly and certainly was not restraining trade” . Rockefeller’s goal was not to create a monopoly but in order to keep his business succeeding he needed directors in each state. By enacting the Sherman Act, Rockefeller’s company struggled, due to competition rising. These laws essentially stopped the growth of successful businesses, such as Hill and Rockefeller, who became so successful due to no government intervention.

This established the idea that people would become “self-reliant”. Individual success was encouraged and government intervention was to be kept minimal. People aspired to achieve these objectives, for example, earning respect, conquering individual goals and measuring success by gaining material status. Laissez Faire was a philosophy used by previous conservative US Presidents, which also promoted minimal government involvement. As America became more industrialised the system faced many problems. The lack of government participation in both of these theories is what led to the American government only coming to the realisation of an economic crisis when it was too

The Sherman Antitrust Act was enacted on July 2nd, 1890 which prohibits activities that restrict interstate commerce and competition in the marketplace.

The Sherman Anti-Trust Act of 1890 was passed to prohibit trusts, this was the first law passed by U.S. Congress to enforce this. This act was named after Senator John Sherman. Before this act was put into place, many other states had enforced laws very similar to the Sherman Anti-Trust Act. These laws were not perfect though, the large corporations had the majority of the economic power. Congress was not pleased with this, thus making the Sherman Anti-Trust Act. This act allowed Congress to regulate interstate commerce, outlawing monopolistic practices. If a person were to violate this act, he or she could be imprisoned for a year and fined five-thousand dollars. This law was successfully used to help Theodore Roosevelt during his campaign, “trust-busting”. Also, President Taft used the law to back himself up against the Standard Oil Trust and American Tobacco Company. The Standard Oil trust was when a board of nine trustees was set up to make all of the company decisions , allowing the company to run as a monopoly. The Sherman Anti-Trust Act allowed both presidents to dissolve the trusts that were creating problems. On the other hand, the Sherman Anti-Trust Act had many holes, it did not have exact wording, therefore allowing companies to still control the majority of the producing and still get away with it. The Sherman Anti-Trust Act had substantial success, but was put to rest and replaced with the Clayton Anti-Trust

Quality and product variety in a monopolistic screening model with nearly rational consumers is an article written by Suren Basov of The Department of Economics. This article is about monopolistic, where the author assumed that the producer is a monopoly. In this article, the author’s main focus is on the case when the irrationality parameter is small in comparison with the characteristic utility differentials but large in the comparison with flavor proliferation costs.

In the article that I have chosen to do it talks about real world monopolies in the United States today. Monopolies are an industry in which there is only one producer. I choose this article because it was very interesting and it really opened my eyes to the monopolies that are in the United States right now. I never really paid attention to them being monopolies until now. There are four big companies that have taken over five major companies in the last 10 years. Apple, Alphabet (which is owned by Google), Amazon, and Facebook took the spots of the five largest companies by market capitalization; they have all changed except for one, which is Microsoft. Exxon Mobil, General Electric, Citigroup, and Shell Oil have all been replaced. I feel

The concept of monopoly relates to a situation where a large part of the market if not all, is controlled by one company or group of companies. Monopoly identifies with the market share ownership where one organization supplies a given product to the market in the absence of alternative or substitute suppliers (Trageks, 2010). The case scenario in this study presents a monopolistic market situation. The fact that Futures Unlimited Corporation is the single license owner approved to distribute and control plutonium presents a monopolistic situation. Monopolistic markets post different results on organizations depending on the company 's management decisions. Although many monopolies employ the single price strategy in ensuring the maximization of profits, the effectiveness of this model posits a question of fact. A single priced monopoly indicates that elasticity in demand affects a single price monopoly in such a way that increased prices lead to decreased consumption of the commodities. In this scenario, the monopolistic situation leads to the reduction of revenue as well as profits. A monopolistic organization will only make profits in the situation where marginal revenues exceed marginal costs. In the event a monopolistic market increases production where revenue equals costs, the company experiences decreased revenues as well as profitability. A single priced monopoly likely has a reducing effect on the company 's profitability with an extra output. However, the