Question

1. read the paragraphs on andrew carnegie. he began vertical integration. define this system. 11. define the horizontal integration system. which famous industrialist used this system? 12. define monopoly. list one positive and one negative of the system. 13. define trust. 14. define holding company. how did the use of holding companies encourage one business to grow its economic power? 15. who was jp morgan and how did he relate to andrew carnegie? 16. what is n.w. ayer and son? why was it necessary? 17. what is a chain store?

Explanation:

These answers define key business and economic concepts and provide historical context related to prominent industrialists and business entities. Each answer focuses on the fundamental meaning of the term and its significance in the business and economic landscape of the relevant historical period.

Answer:

1. Vertical integration is a business strategy where a company controls different stages of the production - supply chain, from raw - material acquisition to product distribution. For example, Andrew Carnegie's steel company owned coal mines, iron ore mines, and railroads to ensure a smooth supply of inputs and efficient transportation of its steel products.
2. Horizontal integration is the process of a company acquiring or merging with other companies in the same industry, at the same stage of the production process. John D. Rockefeller used horizontal integration in the oil industry by buying out many of his competitors to form Standard Oil.
3. A monopoly is a market structure where a single firm controls an entire industry or a particular good/service. Positive: Economies of scale can lead to lower average costs of production, which might potentially be passed on to consumers in the form of lower prices (in theory). Negative: Lack of competition can lead to higher prices, reduced innovation, and lower quality of products or services as the monopolist has little incentive to improve.
4. A trust is a legal arrangement where a group of companies or individuals transfer their assets to a board of trustees. The trustees then manage these assets on behalf of the beneficiaries. In a business context, it was used historically to create monopolistic or oligopolistic control over an industry.
5. A holding company is a company that owns enough voting stock in other companies to control their policies and management, without necessarily being involved in their day - to - day operations. Holding companies can encourage a business to grow its economic power by allowing it to control multiple subsidiaries in different industries or regions, diversifying risk, and enabling easier access to capital and resources.
6. JP Morgan was a prominent American financier and banker. He was involved in many large - scale business deals and consolidations. He bought Andrew Carnegie's steel company and merged it with other steel firms to form U.S. Steel, the first billion - dollar corporation in the world.
7. N.W. Ayer and Son was an advertising agency. It was necessary as the growth of industrialization led to increased production of goods, and companies needed effective ways to promote and sell their products. Advertising agencies like N.W. Ayer and Son helped businesses reach a wider customer base.
8. A chain store is a set of retail stores owned and operated by the same company, which sells similar products across multiple locations. Chain stores can benefit from economies of scale in purchasing, marketing, and distribution.