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A company obtains and operates a license to work in a market and becomes the sole supplier of goods and services. The government only allows the license to one entity. Therefore, no competition is allowed. It can be assigned to a company to operate at the national, state, county or city level. As technology improves, new products may emerge. These new products can therefore create a substitute for the goods produced by the monopolies. This can jeopardize a monopoly. Some examples of this can be found in the parcel delivery industry. The postal service was once the main route through which parcels were delivered. However, when other carriers such as UPS and FedEx emerged, the postal service monopoly was weakened. The Gibbons vs. from the early 19th century. The Ogden case weakened New York`s steamship monopoly and led to an exemption for interstate trade.

However, subsequent slaughter failures revealed that a local law that created a legal monopoly did not violate the rights of other traders in the United States. The postal service is one of the most common legal monopolies in the United States and Europe. As a legal monopoly, the United States Postal Service (USPS) maintains low costs and high-quality services in America. UPSC delivers to more than 100 million delivery points in the United States six days a week. The government uses mandates for an organization to enter and operate alone in a particular industry, prohibiting others from entering the industry. It can help companies generate more sales, reach a wide range of consumers, and enjoy a sense of market leadership, but have followed and complied with government regulations and guidelines, so that in some ways they lose a partial sense of decision-making. Like the popular board game of the same name, a monopoly is a market environment where a business unit owns everything. An illegal monopoly occurs when the main market participant engages in exploitative or exclusive practices. Illegal monopolies strengthen their position as dominant players through exclusive transactions, price discrimination and tied selling agreements.

Professional admission as professional engineers in the US or chartered accountants in the UK does not limit the number of practitioners to just one, but critics sometimes call the system a legal monopoly anyway. Monopolies are illegal in the United States, but there are circumstances in which a natural monopoly can occur. In these circumstances, a market or market sector has barriers to entry that are so prohibitive that only one or a few companies (known as oligopoly) are present. Now that we know what a legal monopoly is, let`s look at some examples to explain this concept. As mentioned earlier, the U.S. Postal Service is a legal monopoly. Although other companies offer parcel delivery, Swiss Post offers both parcel delivery and postal delivery. They are still the dominant delivery system when it comes to postal delivery. The Dutch East India Company, the British East India Company and similar national trading companies have received exclusive commercial rights from their respective national governments. Private independent traders operating outside the scope of these two companies were prosecuted. Therefore, these companies waged wars in the 17th century to define and defend their monopoly zones. Now let`s see what a legal monopoly is.

Similar to a general monopoly, there is only one supplier of a good or service. However, a legal monopoly is supported and maintained by the government, either nationally or in a specific area. In exchange for the government`s support and rights, it then has the right to monitor and regulate all activities, tariffs and policies. Right now, you may be wondering what exactly a legal monopoly is. Well, first of all, it is important to explain the general term monopoly. A monopoly is an enterprise that offers a good or service that has no narrow replacement. It exists when there is only one supplier and there is a barrier that prevents new companies from entering the market and offering competition. A legal monopoly is initially ordered because it is considered the best option for a government and its citizens. For example, AT&T operated as a legal monopoly in the United States until 1982, as it was considered important to have a cheap and reliable service that was easily accessible to all. Railways and airlines have also been operated as legal monopolies, through various periods of history. Arthur runs a pharmaceutical company; He founded the company just two years ago and has forged a name and reputation for himself and his company. Although the company is doing well, there is a lot of competition in the market.

Arthur received a license from the government for his company to produce a particular vaccine. Monopolies are bad for consumers in all areas, with legal monopolies theoretically being the exception. A legal monopoly refers to a company that operates as a monopoly under a government mandate and is legally protected from competitors. A legal monopoly is also known as a legal monopoly. They can be independent and regulated by the state, or can be both operated and regulated by the government. Legal monopolies can be established in the following way: A monopoly exists when free market forces are such that an enterprise can either displace or acquire any other competitor in a market. Once a company is the only player in a market or industry, it is free to set prices at its own discretion. Consumers must accept the terms of a monopolistic enterprise; You have no choice between suppliers. The dominant idea behind the introduction of legal monopolies is that if too many competitors invest in their own supply infrastructure, prices in a particular industry would reach unreasonably high levels. Although this idea has value, it does not last indefinitely, because in most cases capitalism ends up winning through legal monopolies.

As technologies advance and economies evolve, the rules of the game usually balance themselves. As a result, costs are reduced and barriers to entry are reduced. In other words, competition ultimately benefits consumers, more than legal monopolies.