Customer center

We are a boutique essay service, not a mass production custom writing factory. Let us create a perfect paper for you today!

Example research essay topic: United States Postal States Postal Service - 1,537 words

NOTE: Free essay sample provided on this page should be used for references or sample purposes only. The sample essay is available to anyone, so any direct quoting without mentioning the source will be considered plagiarism by schools, colleges and universities that use plagiarism detection software. To get a completely brand-new, plagiarism-free essay, please use our essay writing service.
One click instant price quote

Microeconomics Microeconomics Introduction Theoretical Background United States Postal Service Case Background Industry Objectives Analysis Summary Bibliography Introduction A permanent event in the news is the controversy looming over The Microsoft Corporation, and whether or not it has violated the Anti-Trust Act by controlling over 90 % of the market for computer software systems. But beside local utility companies and The Microsoft Corporation, there is a market monopoly in the United States that is overlooked by many. That is the United States Postal Service. This paper will discuss U.

S. Postal Company concerning microeconomic issues it face. Firstly, some theoretical background involving micro economical concepts is presented. Then paper examines background of company, industry and market peculiarities. After that some presuppositions concerning privatization are analyzed and finally summarized. Theoretical Background In microeconomics, we study the four different market models that exist today, and the various affects each of these markets has on the United States economy as a whole, as well as individual types of business.

The four market models are Pure Competition, Monopolistic Competition, Oligopoly, and Pure Monopoly. Generally, Pure Competition, also called Perfect Competition, is in the best interest of the public. In a Perfect Competition Market, there are a large number of firms present that produce a variety of products. These firms are competing with each other, each trying to win over the money of millions of consumers. This is an incentive for the firms to operate in the most time and cost efficient ways, and keep the prices of their goods at a level high enough to produce a profit, but low enough to entice consumers to buy their product as opposed to a similar product of another firm.

A Pure Monopoly is the exact opposite of Perfect Competition. In a Pure Monopolistic Market system, there is one firm that has complete control over the market of a particular product. In this scenario, this one firm is the only producer and seller of a particular good or service, allowing the firm to directly control the price of the good. A monopoly is not the ideal market system for the average consumer. One of the most common examples of a monopoly would be local utility companies. A pure monopoly exists where there is a sole supplier.

In this case the firm will be the industry. The government definition of a monopoly is a firm, which has a minimum 25 % of the market share. A reference does have to be made to natural monopolies where there is room for only one firm in the industry producing at minimum efficient scale. This situation arises when there is just one source of supply of a raw material or more commonly when economies of scale are significant and permit one firm to supply the entire market at a lower price than any other number of firms. E. g.

water supply. (Bergstrom Ch. 7) Under pure monopoly, the business is the industry and faces the negatively sloped industry demand curve for the product. This means if the monopolist want to sell more of it's product it must lower it's price. Thus, for a monopolist MR is less than price, and the Marginal Revenue (MR) curve lies below the demand curve. One assumption economists make when they compare monopolies to perfectly competitive firms is that the marginal cost of production of many small firms is equivalent to the marginal cost of production of one single large firm, at all possible levels of output. This assumption is necessary because without it the marginal cost curve which would be drawn for the monopolist could be different to the sum of the curves drawn for the competitive industry. If they are different in theory, then it is impossible to say that monopoly output will necessarily be less than perfectly competitive output, and that a monopoly's price will be higher.

If the curves are different, then it would be quite possible for monopoly output to be greater and monopoly price lower than the competitive price, even if competitive firms did set marginal cost equal to price. (Sharp Ch. 8) This possibility is shown in Figure 1: the sum of the small competitive firms' marginal cost curves is much higher than that of the monopoly. As a result, even if the competitive industry sets price equal to marginal cost, its output is less than the monopoly output, even though the monopoly's price is much greater than its marginal cost. Similarly, the competitive price exceeds the monopoly price. Figure 1: If the marginal cost curve for a monopoly isn't identically equal to the sum of the marginal cost curves for competitive firms, then we cant definitively say that competition is better than monopoly. (Sharp Ch. 8) So for the theory to be able to argue that a competitive industry will produce a higher output at a lower price than a monopoly given the assumptions that a competitive industry sets price equal to marginal cost, whereas a monopoly sets price where marginal revenue equal to marginal cost then the sum of all the marginal cost curves of the competitive firms must be equivalent to the marginal cost curve of the monopoly, at all levels of output. United States Postal Service Background The United States Postal Service is a monopoly that controls the market of mail carrying for the entire United States. Although there are more companies that carry and deliver mail, such as the United Parcel Service and Federal Express, the United States Postal Service carries the majority of more than 90 % of residential mail, making it a legal monopoly.

Over the years, there have been many problems faced by the U. S. Postal Service, and equally as many proposed solutions. Twenty years ago, the Postal Service was having a considerable problem with its budget and losing a significant amount of money. In 1979, the Postal Service had a cash flow of $ 22. 5 billion, and was receiving an additional $ 176 million from outside investment. But even that was not sufficient enough for it to be profitable.

That is when privatization was first mentioned, in order to aid in the financing of the under funded Postal Service and eliminate the extreme losses it was experiencing. This would introduce competition into the market. However, it was not put into affect. Instead, the government decided to subsidize the Postal Service to provide for the continuance of its operation. (The U.

S. General Accounting Office Report) At that time, the Postal Service also began to cut its costs in a number of ways. This was done by doing away with various out dated policies. These antiquated methods primarily dealt with mail carriers in rural areas, because it was discovered that the Postal Service was losing the most money in these areas. There were 48, 000 mail carriers delivering mail to millions of residences that were considered to be rural, costing the Postal Service $ 858 million a year. This loss was dealt with by correcting the following problems (The U.

S. General Accounting Office Report): 1. The rural mail carriers were assigned a certain amount of time to deliver to a specific area. These time slots were evidently too large because many of the carriers had free time at which they were being paid for. 2. In other rural areas, mail carriers were being paid by the mile. Many of these areas contained houses that were far apart and the carriers were being paid more than those in urban areas.

When examined, the Postal Service was able to re-configure the routes of the carriers more efficiently, saving $ 26. 8 million a year. 3. An hourly rate was in effect that indirectly promoted inefficient service by enticing the carriers to purposely taking more time to finish their routes. By doing away with this, the postal Service was able to cut costs by $ 255, 000 a year. With these new procedures in effect, as well as some others, the Postal Service has been able to increase profits. Over the past fifteen years, it has been making record-breaking profits. In the first quarter of the fiscal year of 2003, the Postal Service had a net income of $ 3, 9 billion, $ 115 million larger than the predicted forecast, and the profit has continued to increase over the years. (web) Industry The postman and the local post office have been part of the landscape for more than a century.

Even in the world s remotest areas, national postal operators have guaranteed - in return for an almost total monopoly - an affordable service for all. But in the 1990 s, the service on which American economies in particular have grown to depend has become embattled, and threatens to turn into a liability. Complaints are rife - the post is variously held to be "unfriendly, " slow, unreliable, and costly - and technology is eroding the market. Electronic mail has slowed the steady rise in business mail over the years, and the Internet will take yet more of this bread-and-butter business.

To make matters worse, express operators and low-cost distribution networks have begun to capture a share of unprotected business, while regulators may end the post's monopoly in other...


Free research essays on topics related to: marginal cost, united states postal, perfectly competitive, states postal service, general accounting office

Research essay sample on United States Postal States Postal Service

Writing service prices per page

  • $18.85 - in 14 days
  • $19.95 - in 3 days
  • $23.95 - within 48 hours
  • $26.95 - within 24 hours
  • $29.95 - within 12 hours
  • $34.95 - within 6 hours
  • $39.95 - within 3 hours
  • Calculate total price

Our guarantee

  • 100% money back guarantee
  • plagiarism-free authentic works
  • completely confidential service
  • timely revisions until completely satisfied
  • 24/7 customer support
  • payments protected by PayPal

Secure payment

With EssayChief you get

  • Strict plagiarism detection regulations
  • 300+ words per page
  • Times New Roman font 12 pts, double-spaced
  • FREE abstract, outline, bibliography
  • Money back guarantee for missed deadline
  • Round-the-clock customer support
  • Complete anonymity of all our clients
  • Custom essays
  • Writing service

EssayChief can handle your

  • essays, term papers
  • book and movie reports
  • Power Point presentations
  • annotated bibliographies
  • theses, dissertations
  • exam preparations
  • editing and proofreading of your texts
  • academic ghostwriting of any kind

Free essay samples

Browse essays by topic:

Stay with EssayChief! We offer 10% discount to all our return customers. Once you place your order you will receive an email with the password. You can use this password for unlimited period and you can share it with your friends!

Academic ghostwriting

About us

© 2002-2024 EssayChief.com