12-3

Question 1

This is the action of corporations using mass production rather than hand manufacturing in order to speed up production and make goods cheaper.

Answer 1

“economies of scale”

Question 2

This is a cost that a company has to pay regardless of how it works. These costs include mortgages and taxes.

Answer 2

fixed costs

Question 3

This is a cost that a company pays in order to keep it running. These costs include wages and shipping charges.

Answer 3

operating costs

Question 4

These are what companies organized to stop prices from falling and to keep them at a certain level. These didn’t last long, as it would end as soon as one party cut its prices.

Answer 4

pools

Question 5

This is the combining of many firms engaged in a similar type of business into one large corporation. For example, this is like McDonald’s all of a sudden owning every fast food restaurant.

Answer 5

horizontal integration

Question 6

This is when a company owns all of the different businesses it depends on to produce goods. For example, this is like McDonald’s owning its suppliers.

Answer 6

vertical integration

Question 7

This is when a single company achieves control over an entire market, allowing it to charge whatever prices it wanted.

Answer 7

monopoly

Question 8

This is practically a legalized version of horizontal integration. It involved merging businesses without violating laws and enabling trustees to control a group of companies as if they were one large company.

Answer 8

trust

Question 9

This is a person within a trust that is allowed to manage another person’s property.

Answer 9

trustee

Question 10

This is a company that owns the stock of companies that produces products, yet doesn’t produce anything itself.

Answer 10

holding company

Question 11

How did advertising change to sell more products?

Answer 11

Illustrations replaced small type line ads that were in newspapers.

Question 12

This is a store that changed the idea of shopping by bringing a huge assortment of products in a large, glamorous building.

Answer 12

department store

Question 13

This is a store that focuses on offering low prices instead of special services or fancy decorations.

Answer 13

chain stores

Question 14

These were created to reach rural areas of America. Two examples of this are Montgomery Ward and Sears Roebuck.

Answer 14

mail-order catalogs