Classifications of Market Structures in the US

In the unite States providence around commercializes plunder be classified into four different market places structures. But, each and every market in the United States is completely unique from the some others. Generally the best lineament of market structure for the general public is per-fect ambition because it creates the lowest assertable price for the public. there argon some exceptions were perfect competition isnt the best choice for the public on account of various reasons. The United States postal inspection and repair is one of them and since the postal assistant is a monopoly, it is its decl atomic number 18 market.This paper will discuss the bud pulsate dilemmas that the postal help has go about for the past twenty years and if it is in the best interest of the economy for the United States postal avail to continue as a monopoly. The number one time there was talk of privatizing the postal wait on was in 1979 when the postal service of process was los ing vast amounts of money in the long run. But since the Postal receipts is a necessity for America, the goernment had to subsidize the service in order for it to continue in operation. In 1979 the United States Postal usefulness had a cash flow of $22.Billion and was additionally receiving $176 million from investing(1, Intro). eventide with this added revenue the Postal run 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 than efficiency and the public would receive lower prices. But this would also plus the usage of resources, for manakin airplanes and cars.One of the problems the Post Office had was its receipts from consumer purchases that were submitted the following day after the transactio n (1, i). If the receipts were submitted earlier the postal service would receive more money because they could invest that money sooner (1, i). other way the Postal Service could incrementd profits was by competitively selecting banks that would give them higher interest rates and much(prenominal) (1, ii). Probably the most relevant and final way to improve the budget of the Postal Service is to improve the bookkeeping poli-cies and banking techniques (1, ii).Not only did the Post Service externalize to increase profits but they also proposed to cut costs in a number of ways. There were three methods that were proposed in 1946 for the protection of salaries that no longer exists (2, Intro). These permit to do with the arcadian carry carriers. Under this primitive method of waiveing escape 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 osts the postal Service 858 million horses a year (2, i).This is a fairly easy problem to take considering how much money is being lost. It was proposed that money loss could be importantly cut down if the Postal Service corrected the following problems. The rural mail carriers were assigned a certain amount of time to deliver to a specific rural area, this method was out of date and because of this the carriers fork out free time for which they got paid for (2, ii). The next problem was that other mail routes based pay on how many miles he route covered, so the carriers were getting paid by the mile (2, iii).With this problem fixed the Postal Service could saved 26. 8 million a year (2, iii). There was also an hourly rate that was in effect which indirectly promoted incompetent service (2, iii). A stop to this could have saved the Postal Service $255,000 a year (2, iii). From the num-bers mentioned above, it can be seen why the United States Postal Servi ce was losing so much money. These problems did indeed eventually did get solve over the past fifteen years and at one time the Postal Service is making record reaking profits.Now in the first quarter of the monetary year 1996 the Postal Service already has a net income of $1. 2 gazillion (3, 1). Now non only is the Postal Service safe breaking even, but they are also making a profit. On top of that, the 1. 2 billion dollar figure is 115 billion dollars better then the quarterly forecast predicted (3,1). It is incredible that they are not only making a reasonable profit but it is increase over the years. The Postal Service is also instantaneously reducing debts.An example of this is when the Postal Service redeemed a 1.5 illion dollar loan twain years in advance which will save them 22 million dollars of interest in the next two years (3,1). The Postal Service isnt stopping with the revenue that it is receiving now. The Postal Service is planning to increase its internationa l revenues of $1. 2 billion by twice the amount in the next five years and ten-fold by the year 2005 (5, 1). The Postal Service is continually working to streamline their operations for the future that they are now run-ning. The Postal Service is continualy looking to cut back on acquire money.All of the recent financial borrowing has been through the Federal backing Bank, but the Postal Service now is looking into outside sources, such as bonds in the public markets (5, 2). Business are starting to get jealous of the Postal Service because of the great prof-its it is experiencing. The Postal Service is now making a major impact on the United States scrimping (6, 1). Business are pointing out that in 1995 the Postal Service had records of $1. 8 billion in net income and a 1. 7 billion dollar debt reduction (6, 1).The $54 billion revenue that the Postal Service is ringing in would put them in 12th place on the helping 500 list and 33rd on the Fortune Global 500, with the worlds largest corpora-tions (6,1). A recent study showed that domestic direct mail sales were at $333 billion in the year 1994 (6,1). This figure is expected to reach over $500 billion by the year 2000 (6,1). It can be seen end-to-end this paper how the United States Postal Service in-creased profits and does not have to borrow as much money as before. It seems that the Postal Service is doing just fine while it is a monopoly.But there are still two arguments for and gainst the Postal Service continuing to remain a monopoly. On one side compe-tition is thought to make industries in the market more efficient and practice more innova-tive (4, 1). But on the other hand the competition is also thought to lead to a wide-spread beat skimming, with the postal service left only the high-cost, unprofitable markets (4, 1). So who is to discern which market would be better for the American economy as farthest as the Postal Service goes. But it is speculated if the United States Postal Service d oes keep increasing its profits over the years, maybe it will be privatized.