WESTWARD EXPANSION INDUSTRIALIZATION URBANIZATION 1870 1900
AMERICAN INDUSTRY DEVELOPMENT IN THE GILDED AGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Increase competition with them
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Reduce the need for government intervention
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Spread wealth with the smaller business
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Reduce the number of small businesses
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Detailed explanation-1: -Similar to the effects of a merger, monopolies often drive smaller companies out of business. When one company dominates a given market, it can control the prices of products. Because most monopolizing companies are extremely large, they can afford to lower their prices to the point that no small business can compete.
Detailed explanation-2: -The disadvantages of monopolies include price-fixing, low-quality products, lack of incentive for innovation, and cost-push inflation.
Detailed explanation-3: -Because it has no industry competition, a monopoly’s price is the market price and demand is market demand. Even at high prices, customers will not be able to substitute the good or service with a more affordable alternative. As the sole supplier, a monopoly can also refuse to serve customers.
Detailed explanation-4: -A monopoly is characterized by a lack of competition, which tends to lead to higher prices and inferior products. However, the great economic power that monopolies hold has also had positive consequences for the U.S.
Detailed explanation-5: -Monopolies are usually small caps (Though most small businesses are not monopolies.)