United States Postal Services Monopoly

United States Postal Services Monopoly

A monopoly depicts a situation where an individual firm or organisation has a high degree of control in terms of production, supply and distribution. Competing products are either few or lacking in such a scenario. Depending on the nature of the monopoly, different firms source their monopolistic powers from different aspects where they get the status. In order to have monopolistic tendencies, organisations have unique features or characteristics which they utilise to maintain their status (Chauhan). An example of a monopolistic organisation is the United States Postal Services which specialises in mail and postal services. It is a federal government agency which was established and protected by law. It has the mandate of serving all Americans regardless of their locations, status or affiliations. A standard fee is charged for services offered despite where the services are offered. Being one of the largest employers in the country, the agency has accumulated immense infrastructural abilities and assets that enable it to effectively conduct its responsibilities. It also has more than 600,000 employees who are charged with daily operations of the agency (The United States Postal Service).

The agency derives its monopolistic tendencies from different sources. First, it is a government protected agency which is given powers that existing and intending agencies cannot enjoy. For instance, the law allows USPS to set minimum prices that competitors should charge for their services. This creates a legal barrier which may deter most rivals from venturing into the industry. Due to its large scale in operations, the agency enjoys superior economies of scale. This translates to low service charges that are advanced to consumers (The United States Postal Service). Rivals may find it unprofitable to venture into the industry, hence opting to stay away.