Final answer:
Andrew Carnegie overcame the obstacle of high production costs and impurities in iron by adopting the Bessemer Process, which produced stronger, cheaper steel. He also practiced vertical integration to further reduce costs and control the production process.
Step-by-step explanation:
Andrew Carnegie encountered several obstacles in his pursuit to dominate the steel industry. One such challenge was the need to reduce costs and improve the strength and quality of steel.
He overcame this by adopting the Bessemer Process, which involved blowing cold air over hot iron to remove impurities, thus making steel stronger and less expensive to produce. Carnegie also pursued a strategy of vertical integration, buying out suppliers such as mines, freighters, and railroads to cut costs and control every aspect of production.
This savvy business approach, combined with an insistence on up-to-date machinery and equipment, allowed Carnegie to outperform competitors and dominate the U.S. steel market by 1900.
The substance Andrew Carnegie used to solve the problem of impurity in iron and expensive production costs was the innovative Bessemer Process, which revolutionized steel production and greatly reduced costs.