Big Business and MonopoliesMORE THAN JUST A GAME

Why did Big Business grow?Availability of work forceNational markets created by transportationLower-cost productionInventionsAdvertisingFinancial resourcesAccess to raw materials and energy

Key TermsDividend – a sum of money paid to shareholders of a corporation out of earnings.Shareholder – a holder or owner of shares, especially in a company or corporation.Captain of Industry – the head of a large business firm.

Industrial CitiesPittsburg – SteelDetroit – AutomobileChicago – Meat PackingNew England - Textile

Important PeopleJohn D. RockefellerStandard Oil

Andrew CarnegieSteel

Henry FordAutomobile

Cornelius VanderbiltRailroad

Top 10 Largest American Companies in 2006

Company Industry

1 Wal-Mart Retailing

2 Exxon-Mobil Oil & Gas Operations

3 General Motors Automobile

4 Chevron Oil & Gas Operations

5 Ford Motor Company Automobile

6 ConocoPhillips Oil & Gas Operations

7 General Electric Conglomerates

8 Citigroup Banking

9 AIG Insurance

10 IBM Software & Services

Questions 1. What are the three largest American companies?

Wal-Mart, Exxon-Mobil, General Motors

2. Which industry is the represented the most on the top 10 list?

Oil & Gas Operations

3. Why is Wal-Mart the largest American company when it sells everything cheaper?

Global store, millions of stores.

4. Which companies do you think are on the rise? On the fall?

Technology

Automobile

With your partner analyze the political cartoon and answer the following questions:

1. What company does the octopus represent?

Standard Oil

2. What object is the octopus grabbing and controlling?

U.S. Capitol, Shipping Industries, State House, Steel and Copper Industries.

3. According to the artist is the octopus a monopoly? Why/why not?

Yes and opinion

4. Do you think the artist likes monopolies? Why/why not?

Opinion

Bonus: What other industries were dominated by monopolies at the beginning of the 1900s?

Railroads

The Standard Oil Octopus is an example of the control that monopolies had over the economy and the government.

This cartoon was published in 1904 during Teddy Roosevelt's presidency. The only thing not under control of

the octopus is the White House. President Roosevelt is using the Sherman Anti-trust Act to regulate the

monopolies.

Standard Oil and the Sherman Anti-Trust Act

With your partner read the article and answer the questions.

Monopoly Defined Monopoly is a market structure in which there is a single supplier of a good or service. Also, a firm that is the single supplier of a good or service for which there are no close substitutes; also known as monopolist.

The Benefits of CompetitionCompetition forces producers to operate efficiently.Competition lowers prices.Competition improves the quality of goods and services.Competition forces producers to be innovative.

Natural Monopolies: An Exception to CompetitionSome cases exist where competition is not the best alternative.Natural monopolies arise where the operation of one firm lowers industry costs compared to the operation of several firms in the industry.Examples of natural monopolies include utilities which provide:

ElectricityLocal TelephoneNatural GasWaterSewerageCable

One more thing…. Read: Let’s Play Monopoly on your own and answer the questions. When you finish, turn in your handout/notes and pick up your homework.

Next class, be ready to play a new version on monopoly.