Economics becomes a science · 1770s–1920s
1890
The Sherman Antitrust Act
The United States outlaws monopolizing trade, later breaking up Standard Oil.
The Sherman Act of 1890 made it illegal to monopolize trade or conspire to restrain it. In 1911 the Supreme Court used it to break up Standard Oil into 34 companies.
💡 Why it made sense then
Giant trusts controlled oil, railways and sugar, and farmers and small businesses blamed them for high prices.
Ideas it gave us
- 🏗️ Monopoly
A monopoly is a market with a single seller and no close substitutes, which lets it set a higher price and sell less than a competitive market would, creating deadweight loss.
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