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Example of a Monopoly: United States Postal Service

1. A title page, and if necessary, a reference page.
2. You are to choose one existing monopoly that currently exists.
3. You are to provide a brief history of the monopoly, including how it came to be a monopoly.
1. Was it a monopoly that formed naturally or through vertical or horizontal mergers?
4. You need to, in your own words, explain what impact the monopoly has on the marketplace.
5.You need to, in your own words, explain what type of monopoly is it.
1.Is it a government-granted monopoly?
6.Has this monopoly been accused of any of the following abusive conducts:
1.Limiting supply
2.Predatory pricing
3.Price discrimination

Solution Preview

Hello Student,

Before you begin to tackle this assignment, there are a few key terms that you need to bear in mind and be familiar with. First of all you may want to take note that, "a monopoly, as many people know, is a market condition in which only one vendor (usually a large corporation) is in play. There may be other somewhat similar businesses, but a monopoly exists when only one business or individual can provide a product or service." It is often felt that in the United States, "examples of monopolies are difficult to produce, as federal antitrust regulations prohibit monopolistic market conditions. Regardless of legal issues, though, monopolies do exist, primarily in the utilities market. Electricity, for example, is generally available from only one 'electric company' in any given market. Water and cable television are equally exclusive. During the 1990s, Microsoft commanded such a large portion of the computer operating system environment, and demonstrated such a propensity to absorb upstart competitors, that it was believed to be a monopoly as well." Other examples of monopolies include, the United States Postal Service, the National Football League (NFL), Major League Baseball (MLB) and Debeers which controls most of the world's diamond markets.

Your assignment requires you to select a monopoly - which may be any one out of those mentioned above. Lets say you were to choose, the United States Postal Service - the first thing you are required to do is give a brief history of the monopoly and include how it came to be a monopoly. Note the section below:

Overview of United States Postal Service

The history of a formal mail service in the United States dates back to as far as 1639, when the state court of Massachusetts established the first government-authorized drop-off point for mail. The United States Postal Service as we know it today though was first established in 1691, when the British government granted a man by the name of Thomas Neale a 21 year contract under the name of the North American Postal Service. The British government renounced their agreement just 16 years later, and in 1707 they appointed a local deputy to the status of "postmaster general." It was not until 1775 that, a US postal service that was once controlled by the British government came under the control of the US Government.

The United States Postal Service (USPS) is considered to be an independent ...

Solution Summary

This solution provides you with information related to United States Postal Service and its monopoly status. It will assist you in answering a number of questions including, whether the USPS was a monopoly formed naturally or through a vertical or horizantal merger; what impact the USPS monopoly has had on the market place; what type of monopoly USPS is - i.e. whether it is a goverment-granted monopoly or otherwise; and also, information related to limiting supply, predatory pricing and price discrimination is provided within this solution. Note, the solution is adequately referenced.