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Assignment Example

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We often take for granted that there is a distinction between “good” monopolies and “bad” monopolies.  Bad are deemed prejudicial to the public good. Good monopolies were beneficial to the public and accordingly were within the powers of the government…
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In other words, patents give these inventors the right to keep a monopoly for twenty years. Monopolies are so important in this context because if they did not exist, an inventor would probably not receive any financial compensation for his or her work, since the imitators would steal it and flood the market with copied stuff, making the price collapse along with them. As a result, in a world without patents, a lot less people would invest their time, effort and money required to achieve new things. In order to remedy this situation, the nations all around the world offer inventors monopolies on patents. The result is much quicker innovation; an economic growth much more accelerated and at quicker speeds in the lifestyles. In truth, it is difficult to think about a more beneficial monopoly from the social view of patents (http://www.beginnermoneyinvesting.com/html/examples_of_good_monopolies_.htm). 2. USPS The maintenance of the USPS monopoly is good because provision of uniform subsidized mail service (particularly to remote areas) produces positive externalities that would be underproduced by a competitive market; and ii) provision of conventional mail services lends itself to "natural monopolies" in smaller markets. The USPS does not operate its enterprise in order to maximize profits, as would a conventional monopolist. ... Read More
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