A10+-+Monopolies+&+Trusts


 * How was horizontal and vertical integration used to create trusts and monopolies? **


 * Vertical integration: occurs when a business expands it's control over other businesses that are part of it's overall manufacturing process (its entire supply chain). An example is Andrew Carnegie and the steel industry. **

Carnegie controlled businesses at each stage of the steel production. By doing this he could sell steel at a lower price than his competitors because he could monitor the price of all aspects used to produce and transport steel. This would eventually run the competitors out of businesses giving Carnegie a monopoly over the steel industry. He would then raise his prices again once his company was the only corporation in the industry, giving Carnegie maximum control.


 * Horizontal integration: occurs when a business expands it's control over other similar or closely related products to the industry/ business. An example is John Rockefeller and the oil industry. **

Rockefeller and his oil industry controlled other companies that produced the same product. The company (Standard oil) tried to control the oil refineries it could not buy so that he could have authority over the competitors. This process of combining high and competing companies in the same industry led to establishing one of the nation's first trusts since the early 1880's.