Final answer:
The greatest expenses in running a steel factory include the cost of raw materials, energy consumption, and the price of land for establishing the factory. Energy, primarily in the form of coal for power, and materials like iron ore, are fundamental components in steel production, incurring high expenses, which are augmented by land costs.
Step-by-step explanation:
One of the greatest expenses involved in running a steel factory is the cost associated with raw materials and energy. During the height of the steel industry's growth following the Civil War, technologies like the Bessemer process and the open-hearth process revolutionized steel production, leading to an increase in furnaces large enough to produce steel in high quantities. This rapidly growing industry became a key part of the American economy, vastly stimulated by the demand from other sectors such as construction and the automotive industry.
Andrew Carnegie, a notable figure in the steel industry, epitomized the intensive capital required to control every stage of steel production, from raw material sourcing to transportation, achieving significant cost savings and market advantages. However, operating such an expansive and interconnected system comes with substantial expenses, particularly in the acquisition of resources and energy consumption. The cost of coal for power generation, the procurement of iron ore, and the expenses associated with maintaining the infrastructure for efficient production and distribution are all major financial considerations.
Another significant cost highlighted is the price of land required for setting up factories. As steel production involves heavy logistics and the need for large-scale infrastructure, the choice of location can also add to the costs of operating a steel factory.