Monopoly of the Postal Service
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 arket. 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 in 1979 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 millio
These problems did indeed eventually did get solved over the past fifteen years and now the Postal Service is making record breaking profits. During this time it was discussed to privatize the postal service and introduce competition because of the extreme losses that the service was experiencing. One of the problems the Post Office had was its receipts from consumer purchases that were submitted the next day after the transaction (#1, i). Under this antiquated method of delivering mail the Postal Service was los-ing money to any mail that went to "rural" areas (#2, i) There are 48,000 mail carriers that deliver mail to millions of families that are considered to be living in rural settings; this costs the postal Service 858 million dollars a year (#2, i). But there are still two arguments for and against the Postal Service continuing to remain a monopoly. The $54 billion revenue that the Postal Service is bringing in would put them in 12th place on the Fortune 500 list and 33rd on the Fortune Global 500, with the worlds largest corpora-tions (#6,1). It can be seen throughout this paper how the United States Postal Service in-creased profits and does not have to borrow as much money as before. But this would also increase the usage of resources, for example airplanes and cars. Bibliography Bibliography1) United States. The Postal Service isn't stopping with the revenue that it is receiving now. Another way the Postal Service could increased profits was by competitively selecting banks that would give them higher interest rates and such (#1, ii). From the num-bers mentioned above, it can be seen why the United States Postal Service was losing so much money.
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