1. On one diagram, show demand for river transportation, the marginal cost curve for Fulton to provide it, and the marginal cost curve for Vanderbilt to provide it. Indicate the price of travel when Fulton held the legal monopoly, and the price of travel with Vanderbilt competing. Do you think more people traveled each day in the monopoly environment or in the competitive one?
2. Was innovation accelerated or suppressed by the government monopoly granted to Fulton? Why? How did innovation change after the monopoly was broken?
3. Give one or more examples of modern companies that are producing value in restricted markets, like Vanderbilt did. Which companies are lobbying to use legal barriers to keep those companies out of “their” markets?
4. How was Vanderbilt able to operate profitably while Collins made persistent losses?
5. Your history teacher probably told you that transcontinental railroads are so expensive that only governments could build them, and that they should. What historical evidence is there to the contrary? How might private railroads operate differently from government railroads?