ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -With a few minor exceptions, the United States Postal Service enjoys a legal monopoly in the delivery of letters. Under the Private Express Statutes, private letter carriers are subject to fines and/or imprisonment. Why should the U.S.P.S. hold a legal monopoly?

Detailed explanation-2: -The USPS actually has two legally enforced monopolies, as per Title 39 of the US Code. One is over the delivery of anything defined as a “letter, ” which is within certain size and weight limits. The second is over the use of your mailbox.

Detailed explanation-3: -Yes, there are instances where governments act as monopolies when they are the exclusive provider of products or services and have no other competitors.

Detailed explanation-4: -The United States Postal Service is the example of a government monopoly. It was created through laws that ban potential competitors from offering certain types of services, such as first-class and standard mail delivery.

Detailed explanation-5: -What is “natural” about a natural monopoly? A natural monopoly develops automatically due to economies of scale. The U.S. Postal Service (USPS) is a monopoly because the federal government has blocked entry into the market for delivering first-class mail.