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Postal Service As a Monopoly
In the United States economy most markets can be classified into four
different markets structures. But, each and every market in the United
States is completely unique from the others. Generally the best type of
market structure for the general public is per-fect competition because
it creates the lowest possible price for the public. There are some
exceptions were perfect competition isn't the best choice for the public
on account of various reasons. The United States Postal Service is one
of them and since the Postal Service is a monopoly, it is its own
market. This paper will discuss the budget dilemmas that the postal
service has faced for the past twenty years and if it is in the best
interest of the economy for the United States Postal Service to continue
as a monopoly.
The first time there was talk of privatizing the Postal Service was
in1979 when the Postal Service was losing vast amounts of money in the
long run.
USPS service delivery truck in a residential area ...
English: United States Postal Service headquarters...
English: United States Postal Service, Ford Windst...But since the Postal Service is a necessity for America, the
government had to subsidize the service in order for it to continue in
operation. In 1979 the United States Postal Service had a cash flow of
$22.5 Billion and was additionally receiving $176 million from
investing(#1, Intro). Even with this added revenue the Postal Service
was still greatly under funded on its own (#1, Intro). During this time
it was discussed to privatize the postal service and introduce
competition because of the extreme losses that the service was
experiencing. A positive argument for privatizing the Postal Service
was with numerous competitors in the market there would be more
efficiency and the public would receive lower prices. But this would
also increase the usage of resources, for example airplanes and cars.