ECON Video #5

ECON Video #5 - Michael Blasius 10/25/07 Video #6 Monopoly:...

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Michael Blasius 10/25/07 Video #6 Monopoly: Who’s in Control? In 1890, Standard Oil, owned by John D Rockefeller, had a stranglehold on the oil industry. By buying the oil that other men drilled, made tons of money because he was able to control the price of oil. Because of rising oil costs, the Sherman Anti-Trust Act was signed into legislation effectively making monopolies like Rockefeller’s unlawful. The act specified that no one company can own all of the production in one market. After the legislation, the monopoly was broken by competition from Western Oil and other companies. Because of the added competition, productivity went up and prices went down. When one company is allowed to control the whole industry, they can set whatever price they want for their goods because there is no competition. Bell Telephone Company had a monopoly on the telephone industry because the company was able to put other companies out of business and Bell owned the entire long- distance network. Because no one else could afford the costs of a long distance network, the
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ECON Video #5 - Michael Blasius 10/25/07 Video #6 Monopoly:...

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