Good and Bad Monopolies - Assignment Example

 Patents

Monopolies are important 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 fewer people would invest their time, effort, and money required to achieve new things.

In order to remedy this situation, 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.

USPS

The maintenance of the USPS monopoly is good because the 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. Costs of mail carriage between densely populated centers are vastly lower than between more sparsely populated areas. A profit-maximizing monopolist would quickly either raise rates for rural areas or abandon such routes altogether. Such a monopolist would use its market power to generate higher profits. By contrast, the USPS uses much of the extraordinary profit extracted under its legislatively ordained market power to subsidize unprofitable routes at the expense of profitable ones.
Other Public Utilities

Such as Electricity Companies, Natural Gas companies, etc. whose services/s are beneficial to the public.