In the United States we value competition in our market system. Competition is a regulating force, along with the self-interest of the consumer in the U.S. economy. They work together to keep prices low and bring new products to the market place; they also foster innovations that help bring down the cost of doing business. But are there times when one supplier in a market is better than a competitive market? Should the government work to protect that one supplier in a market? This lesson will explore the idea of monopolies and the actions the government uses when faced with monopolies.
In this lesson you will explore monopolies and natural monopolies. You will also examine the rise of monopolies in the United States and their effect on the economy. You will use the following PowerPoint presentation to gather information about monopolies. Then you will answer the questions at the end of the lesson to evaluate your knowledge of monopolies.
Use the Monopoly Presentation to explore the history of monopolies in the United States. Next, use the Web links listed below to discover information about monopolies and their role in the economy of the United States.
- Rise of Monopolies
- Monopoly Definition
- Profit Definition
- Entrepreneurship Definition
- Markets Definition
- Market Structure Definition
- U.S. v. Microsoft: Timeline
- Interstate Commerce Act (1887)
What information did you discover in reading the presentation and related Web sites? Do you think monopolies are good or bad? In explaining the position you take, use facts from the information you have just read.
Monopolies arise when one company can dominate a market. We can find examples from the railroad industry in the early nineteenth century, 0r we can use the example of Microsoft and the computer industry in the early twenty-first century. Consumers benefit when there is competition in a market place. Monopolies sometimes limit competition and cause prices to be higher than they would be in a competitive market. Will Microsoft run into the same problems that certain companies in the railroad industry encountered? Or can Microsoft keep its status as the largest software business in the world? Only time will tell.
What is your definition of market?
What is your definition of monopoly?
What is your definition of entrepreneur?
- What is your definition of profit?
Using examples of companies from the railroad and computer industry, explain how they achieved monopoly status.
Answers should follow the information in the links that describe the two industries:
The Development of the Railroad Monopoly
The Making of Microsoft
The Building of Big Blue
What do the critics of the case United States v. Microsoft say about the governments case? Do you agree or disagree? Use facts to backup your arguments.
What's Microsoft up to now?
Research the various cases against Microsoft and write an essay detailing the current state of legal action against Microsoft. The search can be local or international.
Below are a few Web links to help you start your investigation.