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Monopolies

Definition

Monopolies refer to situations where a single company or group dominates an industry, controlling the production and distribution of goods or services. This concentration of power often leads to limited competition and higher prices for consumers.

Analogy

Imagine you're playing a game of soccer, but one player on the opposing team decides they will be the only one allowed to touch the ball. They control everything and make it impossible for your team to score goals. That's what monopolies do in industries - they dominate and limit competition.

Related terms

Trusts: Trusts are large business combinations where multiple companies in an industry join forces under a single board of directors. They can behave like monopolies by eliminating competition.

Sherman Antitrust Act: This was a law passed in 1890 during the Gilded Age that aimed to prevent monopolistic practices by prohibiting certain business activities that restricted trade or created unfair competition.

Andrew Carnegie: He was a prominent industrialist during the Gilded Age who built a steel empire through vertical integration, which contributed to his dominance in the industry.