ECONOMICS
COMPETITION AND MARKET STRUCTURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Government Monopoly
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Natural Monopoly
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Technological Monopoly
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Geographic Monopoly
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Detailed explanation-1: -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-2: -One argument is that the U.S.P.S. constitutes a “natural” monopoly. That is, it is contended, it would be impossible for competing private firms to provide efficient service. Thus, it is argued, we need a government-run monopoly.
Detailed explanation-3: -Today, government-granted monopolies may be found in public utility services such as public roads, mail, water supply, and electric power, as well as certain specialized and highly regulated fields such as education and gambling.
Detailed explanation-4: -The United States Postal Service: A Monopoly Analysis In fact the United States Postal Service (USPS) is a form of legalized monopoly, or natural monopoly (Ayers & Collinge, 1995).
Detailed explanation-5: -Given that mail is a declining market with increasing costs, it will remain a monopoly because it is unprofitable to serve even by one company constrained by price ceilings for its mail products.