The Postal Service Monopoly

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The Postal Service 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 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 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. 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). If the receipts were submitted earlier the postal

service would receive more money because they could invest that money

sooner (#1, i). Another way the Postal Service could increased

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