Big Business and Monopolies MORE THAN JUST A GAME Why did Big Business grow? Availability of work force National markets created by transportation Lower-cost production Inventions Advertising Financial resources Access to raw materials and energy Key Terms Dividend – 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 Cities Pittsburg – Steel Detroit – Automobile Chicago – Meat Packing New England - Textile Important People John D. Rockefeller Standard Oil Andrew Carnegie Steel Henry Ford Automobile Cornelius Vanderbilt Railroad 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 The Standard Oil Octopus is an 2.example of the control that What object is the octopus grabbing and controlling? U.S. Capitol,and Shippingthe Industries, State House, Steel and monopolies had over the economy government. Copper Industries. 3. According to the artist is the octopus a monopoly? This cartoon was published in 1904 during Teddy Why/why not? Yes and opinion Roosevelt's presidency. The only thing not under control of 4. Do you think the artist likes monopolies? Why/why not? the octopus is the White House. OpinionPresident Roosevelt is Bonus: What other industries were dominated by using the Sherman Anti-trust Act tobeginning regulate monopolies at the of the 1900s?the Railroads 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 Competition Competition 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 Competition Some 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: Electricity Local Telephone Natural Gas Water Sewerage Cable 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.