Question

Provide a brief history of Standard Oil Co Inc (owned by John D. Rockerfeller) and of how antitrust issues led to its break up; discuss the market structure both before and after the break up(i.e., using the characteristics of market structures); explain how the nature of goods and services the firm provides to the marketplace have changed.

Answer 1

In 1870, Rockfeller owner of Standard Oil had been buying its competitors and using its size to receive benefits which other smaller companies cannot receive

By 1882 he joined his partners to create Standard Oil Trust which managed large number of companies to control distribution,, refining, marketing and other functions.

As results this violated Antitrust sherman Act which prohibits any monopolisation of market which reduces competition and forces them to exit because of unsustainability

Market structure was monopoly before breakup and after its breakup into 34 companies it eventually turned out into perfect competition markets structure .

Nature of goods and services provided earlier were at high prices and high margins, however now prices have stabilised due to enough competition and large scale refining and distribution. Goods are more streamlined and are of better quality with technology innovation and scale too has considerably improved post breakup.