Trusts

[A18]

I know a trust is a business entity that tries to control a market, but I don't know much about their history.

Can someone give me an example of a trust, and why anti-trust laws are necessary.

[Dr. Cynic]

Hmm.... I couldn't describe it all myself. A recent example is Wal-Mart, who is really controlling it's market.

Rockefeller's Oil is the best example I can think of.

Phillip, try a google search for a more in depth answer.

[A18]

What specifically did Rockefeller do?

Also, I don't know about WalMart. Why would you call that a trust?

[Dr. Cynic]

Trust is basically another word for monopoly (Right from my marketing teacher's mouth).

Wal-Mart opened to put K-Mart out of business, or essentially control the market (At the time, there was no other big competitor to K-Mart) Wal-Mart hasn't reached it's ultimate objective, but they will within 10-20 years.

On to Rockefeller....

He could afford to lower his prices to put his competition Out of Business.

How about Vince McMahon's WWF(E)? At one time there were many promotions (NWA, AWA, WWF, WCW Mid-South, World Class, etc.) Now there's just one.

Like I said though, try a search for a better description.

[A18]

A monopoly can exist for a lot of reasons. You don't always need competition as long as there is the threat of competititon to keep you in line.

Nothing wrong with lowering your prices to put your competitors out of business.

[J. J.]

it was a group of owners getting together to set prices and supply in a specific industry.  

[A18]

it was a group of owners getting together to set prices and supply in a specific industry. 

That was my impression of a trust. So for example, a bunch of companies agreeing to raise prices on a certain product, so they'd all benefit from it.

However, this would create a market opportunity for new businesses, which would pop up and offer the product for less.

Of course, you have to be able to offer the product. But it seems to me impossible to lock up enough wealth in one sector of the economy to screw over everyone else.

[Dave from Michigan]

Wal mart is not a monopoly.  K-mart going under was mostly it's own fault.

[John Dibble]

Trust is basically another word for monopoly (Right from my marketing teacher's mouth).

Actually, that's not really true. A monopoly is when a single company controls a market, and lacking competition it can raise prices to what is most profitable rather than the lower value that a competitive market would bring.

A trust emulates a monopoly, but it is not a real monopoly - a trust is pretty much a cartel, like OPEC - groups of companies get together and decide on all increasing prices at once, rather than competing with eachother(which, once again, would result in them selling at lower prices to get a bigger share of the market). A trust is called a trust because there is trust involved - there is no gaurantee that a company in the trust will not lower their prices to get a bigger share of the market, increasing their own profits while decreasing the profits of the others in the market. OPEC, as mentioned, is a trust, or cartel, on oil - member countries get together, decide the price they will all sell oil at, and then do that, but it is usually the case they can't keep prices high for long because every country is under pressure(both economic and political) to lower their prices. Eventually one or more members of the trust sell lower and the rest are forced to do the same if they want to keep their customers.