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Impact of Big Business on Market Competition in the Industrialization Era

Explore how increased factory productivity affected market competitiveness during the Industrialization era. Learn about big business types, monopolies, captains of industry, and the societal impact of industrial giants. Discuss the repercussions of monopolies and the evolution of corporate dominance, as well as the role of public policy in regulating market competition.

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Impact of Big Business on Market Competition in the Industrialization Era

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  1. Industrialization Lesson 3 How did increased productivity in factories affect the competitive nature of markets?

  2. Review • What determines Productivity? • Resources • Transportation • Public Policy • Technology

  3. Industrialization = Era of Big Business • What is a big business? • Gigantic companies that own numerous plants or factories and sell products nationwide • It requires a large investment, too large for one individual

  4. Types of big businesses • Corporations • Companies formed by a group of investors • Trust • Group of corporations come together to form one • Monopoly • One Business in control of a particular product • No competition

  5. How does a corporation become a monopoly? • Horizontal Integration • Buying up all the companies in your industry • Ex. Standard Oil Company – bought other oil companies • Impact?

  6. How does a corporation become a monopoly? • Vertical Integration • Buying up businesses that relate to one another • Ex. Carnegie Steel – owned iron ore mines, Rail road, and steel mills • Impact?

  7. How did big businesses (factories) affect the competitive nature of markets? • Positives • Lower Prices • Products reach all over U.S. • New products available • Negatives • Eliminates competition (smaller business can’t survive) • Monopolies may increase prices • Take less care of employees

  8. Captains of Industry • John D. Rockefeller • Owner of Standard Oil Company • Practiced Horizontal integration • Eliminated competition by lowering prices and spying on other companies.

  9. Captains of Industry • Andrew Carnegie • “Rags to riches” • Carnegie Steel • Vertical integration • Dirty Tactics • Philanthropist – gave away his money

  10. Discussion Questions? • What happened to Competition during the Industrialization era? • Who is supposed to monitor this? Why didn’t anyone stop it? • Can you think of a big business today that has low prices and uses them to eliminate the competition?

  11. How do the people feel about these large companies and their leaders? • Use the political cartoons to answer the following questions on a separate sheet of paper. • Identify the symbols and characters in the cartoon. (list) • What does each symbol represent? • Describe the action taking place in the cartoon. • What is the cartoonist trying to say?

  12. Political Cartoons

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