Why was Carnegie Steel considered a vertical monopoly?

Why was Carnegie Steel considered a vertical monopoly?

a. The company controlled every step of steel production, from raw materials to distribution.

b. The company controlled all the steel plants in the country.

c. The company became the only source of steel after competitors went out of business.

d. The company was able to produce more steel than any other steel company in the world.

Answer: a. The company controlled every step of steel production, from raw materials to distribution.

The company was proved to have vertical monopoly due to the fact that it undertook all the stages of steel manufacturing right from acquisition of raw materials to selling of the final manufactured steel. Andrew Carnegie, who established this firm, elaborated a process of vertical integration by developing iron ore mines, coal mines, railroad transport, and mills producing steel. This strategy used made Carnegie Steel Company acquired the heights of the steel production industry, override every factors connected with the production line. Thus, Carnegie Steel effectively eradicated the presence of outside suppliers or transport agencies, which clearly can be seen as a crucial competitive edge over other existing companies. This vertical integration method played a major role in Carnegie Steel to dominate the steel industry and also brought them the advantages of Economies of large scale and so this is an excellent example of vertical monopoly.