Question

Q) Would you give us another notorious example like Monopoly case in the past or present (such as Standard Oil, Morgan House, OPEC with high energy price, lately case of INTEL)? Your Monopoly example should be based on high concentration of market share and high abnormal profits.

Would be greatly appreciated if Answered in 5sentences by out own.

Answer 1

Answer:

1. Standard oil:

Founded by the richest man in history, Standard Oil was the product of John D. Rockefeller. In 1882, Standard Oil’s properties were incorporated into the Standard Oil Trust. Under this banner, Rockefeller formed a conglomeration that handled all oil production, transportation, refinement and marketing. By 1890, Standard Oil controlled 88% of the refined oil flows in the United States. At the turn of the century, the company controlled 91% of oil production and 85% of its final sales.

In 1909, Standard Oil’s hold on the oil industry began to slip. The US Department of Justice sued the company under federal anti-trust law for sustaining a monopoly. Among the laundry list of complaints, the lawsuit argued that Standard had engaged in “discriminatory practices in favor of the combination by railroad companies; restraint and monopolization by control of pipe lines, and unfair practices against competing pipe lines.”

2.

Beginning its life as the Bell Patent Association, American Telephone and Telegraph (AT&T) created the nation’s first commercially viable long-distance network. In 1907, AT&T president Theodore Vail created a new mantra to guide the company: One Policy, One System, Universal Service. Earning the nickname “Ma Bell,” AT&T built a monopoly within the telephone industry by purchasing its competitors.

AT&T’s monopoly was further cemented in 1918 when the federal government nationalized the telecommunications industry. AT&T, of course, was awarded the contract largely because the government disallowed competitors from installing new lines that would render AT&T’s redundant.

AT&T’s stranglehold on the market was slowly loosened as new technologies made old systems obsolete. Satellite communications, fiber optics and cellular telephones all contributed to the eventual dismantling of “Ma Bell” which was split into seven smaller companies colloquially referred to as “Baby Bells.”