Postal Service As a Monopoly

Essay by Anonymous UserUniversity, Master'sA+, January 1996

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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.

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.