The business practices that contributed most to Andrew Carnegie’s ability to form a monopoly is by combining his companies into one company, and controlling all aspects of steel production.
<h2>Further Explanation
</h2><h3>Monopoly
</h3>
- A monopoly is a type of market structure where there is a single producer and many buyers.
- A single firm controls the market as it has the highest market power and consumers lack other options.
<h3>Features of monopoly
</h3>
Monopolist maximizes the profit
Monopoly sets the price
High barriers to exit and entry to the market
A sole firm dominates and controls the market
<h3>Example of monopoly</h3><h3>Carnegie Steel </h3>
- In the 1970s, Andrew Carnegie believed that controlling all aspects of steel production would help him bring the cost of the production down.
- He bought companies at every level of steel production from raw materials to distribution and combined all into one company.
- Carnegie steel then merged with US steel making the largest steel company which was a monopoly and fully controlled all transaction on the steel market at its peak.
<h3>Other type of market structures
</h3><h3>Perfectly competitive market
</h3>
- This is a type of market structure that is hypothetical and is considered to have a very high level of competition.
<h3>Monopolistic competition
</h3>
- It is a market structure that has many small firms competing against each other.
- These firms sell similar products that are slightly differentiated in terms of branding, packaging, etc.
<h3>Oligopoly
</h3>
- A market structure that is dominated by few firms thus there is limited competition.
Keywords: Monopoly, market structure, example of monopolies
<h3>Learn more about:
</h3>
Level: High school
Subject: Business
Topic: Market structures
Sub-topic: Monopoly
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