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129-543: South African Post Office ( SA Post Office ) is the national postal service of South Africa and as a state owned enterprise , its only shareholder is the South African government. In terms of South African law, the Post Office is the only entity that is legally allowed to accept reserved mail, and as such, it operates a monopoly. It employs over 16,480 people and operates more than 1,400 postal outlets throughout

258-504: A legal monopoly . The worldwide postal system constituting the individual national postal systems of the world's self-governing states is coordinated by the Universal Postal Union , which among other things sets international postage rates, defines standards for postage stamps and operates the system of international reply coupons . In most countries a system of codes has been created (referred to as ZIP codes in

387-510: A postal, telegraph and telephone (PTT) service oversees the postal system, in addition to telephone and telegraph systems. Some countries' postal systems allow for savings accounts and handle applications for passports . The Universal Postal Union (UPU), established in 1874, includes 192 member countries and sets the rules for international mail exchanges as a Specialized Agency of the United Nations . The word mail comes from

516-405: A " de jure monopoly") is a form of coercive monopoly , in which a government grants exclusive privilege to a private individual or company to be the sole provider of a commodity. Monopoly may be granted explicitly, as when potential competitors are excluded from the market by a specific law , or implicitly, such as when the requirements of an administrative regulation can only be fulfilled by

645-509: A PC market are price takers. The price is set by the interaction of demand and supply at the market or aggregate level. Individual companies simply take the price determined by the market and produce that quantity of output that maximizes the company's profits. If a PC company attempted to increase prices above the market level all its customers would abandon the company and purchase at the market price from other companies. A monopoly has considerable although not unlimited market power. A monopoly has

774-637: A block of dots as a two-dimensional barcode . The "block of dots" method allows for the encoding of proof of payment of postage, exact routing for delivery, and other features. The ordinary mail service was improved in the 20th century with the use of planes for a quicker delivery. The world's first scheduled airmail post service took place in the United Kingdom between the London suburbs of Hendon and Windsor, Berkshire , on 9 September 1911. Some methods of airmail proved ineffective, however, including

903-739: A boarding pass before boarding an airplane. Most travelers assume that this practice is strictly a matter of security. However, a primary purpose in requesting photographic identification is to confirm that the ticket purchaser is the person about to board the airplane and not someone who has repurchased the ticket from a discount buyer. The inability to prevent resale is the largest obstacle to successful price discrimination. Companies have, however, developed numerous methods to prevent resale. For example, universities require that students show identification before entering sporting events. Governments may make it illegal to resell tickets or products. In Boston, Red Sox baseball tickets can only be resold legally to

1032-598: A company cannot charge more than the market price. Any market structure characterized by a downward sloping demand curve has market power – monopoly, monopolistic competition and oligopoly. The only market structure that has no market power is perfect competition. A company wishing to practice price discrimination must be able to prevent middlemen or brokers from acquiring the consumer surplus for themselves. The company accomplishes this by preventing or limiting resale. Many methods are used to prevent resale. For instance, persons are required to show photographic identification and

1161-426: A consumer's tax return has information that can be used to charge customers based on an estimate of their ability to pay. In second degree price discrimination or quantity discrimination customers are charged different prices based on how much they buy. There is a single price schedule for all consumers but the prices vary depending on the quantity of the good bought. The theory of second degree price discrimination

1290-438: A consumer's willingness to pay is rarely available. Sellers tend to rely on secondary information such as where a person lives (postal codes); for example, catalog retailers can use mail high-priced catalogs to high-income postal codes. First degree price discrimination most frequently occurs in regard to professional services or in transactions involving direct buyer-seller negotiations. For example, an accountant who has prepared

1419-549: A customer's willingness to buy a good is difficult. Asking consumers directly is fruitless: consumers do not know, and to the extent they do they are reluctant to share that information with marketers. The two main methods for determining willingness to buy are observation of personal characteristics and consumer actions. As noted information about where a person lives (postal codes), how the person dresses, what kind of car he or she drives, occupation, and income and spending patterns can be helpful in classifying. The price of monopoly

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1548-492: A different price. Third degree price discrimination is the most prevalent type. There are three conditions that must be present for a company to engage in successful price discrimination. First, the company must have market power. Second, the company must be able to sort customers according to their willingness to pay for the good. Third, the firm must be able to prevent resell. A company must have some degree of market power to practice price discrimination. Without market power

1677-537: A dominant position or a monopoly in a market is often not illegal in itself; however, certain categories of behavior can be considered abusive and therefore incur legal sanctions when business is dominant. A government-granted monopoly or legal monopoly , by contrast, is sanctioned by the state, often to provide an incentive to invest in a risky venture or enrich a domestic interest group . Patents , copyrights , and trademarks are sometimes used as examples of government-granted monopolies. The government may also reserve

1806-400: A few entities have market power and therefore interact with their customers (monopoly or oligopoly), or suppliers (monopsony) in ways that distort the market. Monopolies can be formed by mergers and integrations, form naturally , or be established by a government. In many jurisdictions, competition laws restrict monopolies due to government concerns over potential adverse effects. Holding

1935-622: A form of meter label and thus do not need to be cancelled.) Documents should generally not be read by anyone other than the addressee; for example, in the United States of America it is a violation of federal law for anyone other than the addressee and the government to open mail. There are exceptions however: executives often assign secretaries or assistants the task of handling their mail; and postcards do not require opening and can be read by anyone. For mail contained within an envelope, there are legal provisions in some jurisdictions allowing

2064-424: A given product or service. If there is a single seller in a certain market and there are no close substitutes for the product, then the market structure is that of a "pure monopoly". Sometimes, there are many sellers in an industry or there exist many close substitutes for the goods being produced, but nevertheless, companies retain some market power. This is termed "monopolistic competition", whereas in an oligopoly ,

2193-409: A high rate of return or monopoly prices and might represent risk premiums . Monopolies derive their market power from barriers to entry – circumstances that prevent or greatly impede a potential competitor's ability to compete in a market. There are three major types of barriers to entry: economic, legal, and deliberate. In addition to barriers to entry and competition, barriers to exit may be

2322-433: A higher price than P ∗ {\displaystyle P^{*}} and those who will not pay P ∗ {\displaystyle P^{*}} but would buy at a lower price. A price discrimination strategy is to charge less price sensitive buyers a higher price and the more price sensitive buyers a lower price. Thus additional revenue is generated from two sources. The basic problem

2451-515: A market and what does not are relevant distinctions to make in economic analysis. In a general equilibrium context, a good is a specific concept including geographical and time-related characteristics. Most studies of market structure relax a little their definition of a good, allowing for more flexibility in the identification of substitute goods. A monopoly has at least one of these five characteristics: Market power can be estimated with Lerner index . High profit margins might not correspond to

2580-416: A maximum value then continuously decreases until total revenue is again zero. Total revenue has its maximum value when the slope of the total revenue function is zero. The slope of the total revenue function is marginal revenue. So the revenue maximizing quantity and price occur when MR = 0 {\displaystyle {\text{MR}}=0} . For example, assume that the monopoly's demand function

2709-410: A monopolist to increase its profit by charging higher prices for identical goods to those who are willing or able to pay more. For example, most economic textbooks cost more in the United States than in developing countries like Ethiopia . In this case, the publisher is using its government-granted copyright monopoly to price discriminate between the generally wealthier American economics students and

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2838-454: A monopoly is that the monopoly has a downward-sloping demand curve rather than the "perceived" perfectly elastic curve of the PC company. Practically all the variations mentioned above relate to this fact. If there is a downward-sloping demand curve then by necessity there is a distinct marginal revenue curve. The implications of this fact are best made manifest with a linear demand curve. Assume that

2967-509: A monopoly. Often, a natural monopoly is the outcome of an initial rivalry between several competitors. An early market entrant that takes advantage of the cost structure and can expand rapidly can exclude smaller companies from entering and can drive or buy out other companies. A natural monopoly suffers from the same inefficiencies as any other monopoly. Left to its own devices, a profit-seeking natural monopoly will produce where marginal revenue equals marginal costs. Regulation of natural monopolies

3096-447: A more elastic demand for movies than do young adults because they generally have more free time. Thus theaters will offer discount tickets to seniors. Assume that by a uniform pricing system the monopolist would sell five units at a price of $ 10 per unit. Assume that his marginal cost is $ 5 per unit. Total revenue would be $ 50, total costs would be $ 25 and profits would be $ 25. If the monopolist practiced price discrimination he would sell

3225-496: A more price inelastic demand and a relatively lesser price to the group with a more elastic demand. Examples of third degree price discrimination abound. Airlines charge higher prices to business travelers than to vacation travelers. The reasoning is that the demand curve for a vacation traveler is relatively elastic while the demand curve for a business traveler is relatively inelastic. Any determinant of price elasticity of demand can be used to segment markets. For example, seniors have

3354-526: A number of years, been suffering increasing financial losses due to mismanagement, corruption, and competition from the private sector. On 12 April 2023 it was provisionally liquidated, putting the jobs of 16,400+ employees at risk and creating problems for its clients, especially in the rural areas. On 27 September 2023, Postbank was officially separated from the Post Office as The Postbank SOC Limited. Mail Postal authorities often have functions aside from transporting letters. In some countries,

3483-421: A perfectly elastic demand curve meaning that total revenue is proportional to output. Thus the total revenue curve for a competitive company is a ray with a slope equal to the market price. A competitive company can sell all the output it desires at the market price. For a monopoly to increase sales it must reduce price. Thus the total revenue curve for a monopoly is a parabola that begins at the origin and reaches

3612-751: A postal system in the Empire, appointing Franz von Taxis to run it. This system, originally the Kaiserliche Reichspost , is often considered the first modern postal service in the world, which initiated a revolution in communication in Europe. The system combined contemporary technical and organization means to create a stable transcontinental service which was also the first to offer (fee-based) public access. The Thurn und Taxis family, then known as Tassis, had operated postal services between Italian city-states from 1290 onward. For 500 years

3741-477: A price increase, price elasticity tends to increase, and in the optimum case above it will be greater than one for most customers. A company maximizes profit by selling where marginal revenue equals marginal cost. A company that does not engage in price discrimination will charge the profit maximizing price, P ∗ {\displaystyle P^{*}} , to all its customers. In such circumstances there are customers who would be willing to pay

3870-636: A private mail service. Notably, the Cistercians had one which connected more than 6,000 abbeys , monasteries , and churches. The best organization, however, was created by the Knights Templar . In 1716, Correos y Telégrafos was established in Spain as public mail service, available to all citizens. Delivery postmen were first employed in 1756 and post boxes were installed firstly in 1762. In 1505, Holy Roman Emperor Maximilian I established

3999-424: A single agent or entrepreneur, the optimal decision is to equate the marginal cost and marginal revenue of production. Nonetheless, a pure monopoly can – unlike a competitive company – alter the market price for its own convenience: a decrease of production results in a higher price. In the economics' jargon, it is said that pure monopolies have "a downward-sloping demand". An important consequence of such behaviour

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4128-587: A small Telephone Boutique next to a historic Postal mansion his ancestors used to go to centuries earlier. Several European Post Carriers like Deutsche Post or Österreichische Post continue to use the Thurn & Taxis Post Horn in their company logo just like the global Phone Book of the World based in the old Postal mansion of King Louis XIV in Paris. In the United Kingdom, prior to 1840 letters were paid for by

4257-482: A source of market power. Barriers to exit are market conditions that make it difficult or expensive for a company to end its involvement with a market. High liquidation costs are a primary barrier to exiting. Market exit and shutdown are sometimes separate events. The decision of whether to shut down or operate is not affected by exit barriers. A company will shut down if the price falls below minimum average variable costs. While monopoly and perfect competition represent

4386-402: A substitute. Contrary to common misconception , monopolists do not try to sell items for the highest possible price, nor do they try to maximize profit per unit, but rather they try to maximize total profit. A natural monopoly is an organization that experiences increasing returns to scale over the relevant range of output and relatively high fixed costs. A natural monopoly occurs where

4515-574: A suspected criminal conspiracy, although black chambers (largely in the past, though there is apparently some continuance of their use today) opened extralegally. The mail service may be allowed to open the mail if neither addressee nor sender can be located, in order to attempt to locate either. Mail service may also open the mail to inspect if it contains materials that are hazardous to transport or violate local laws. Monopoly A monopoly (from Greek μόνος , mónos , 'single, alone' and πωλεῖν , pōleîn , 'to sell')

4644-421: A universal service to all the citizens of the country. The South African Post Office Group currently consist of a number of divisions and subsidiaries operating in the fields of mail, financial services, logistics, property, electronic commerce and retail services. Traditional collection, sorting and delivery of letters and parcels constitute the primary business activity of the group, responsible for nearly 65% of

4773-406: Is P = 50 − 2 Q {\displaystyle P=50-2Q} . The total revenue function would be TR = 50 Q − 2 Q 2 {\displaystyle {\text{TR}}=50Q-2Q^{2}} and marginal revenue would be 50 − 4 Q {\displaystyle 50-4Q} . Setting marginal revenue equal to zero we have So

4902-502: Is a consumer is willing to buy only a certain quantity of a good at a given price. Companies know that consumer's willingness to buy decreases as more units are purchased. The task for the seller is to identify these price points and to reduce the price once one is reached in the hope that a reduced price will trigger additional purchases from the consumer. For example, sell in unit blocks rather than individual units. In third degree price discrimination or multi-market price discrimination

5031-404: Is a market in which one person or company is the only supplier of a particular good or service. A monopoly is characterized by a lack of economic competition to produce a particular thing, a lack of viable substitute goods , and the possibility of a high monopoly price well above the seller's marginal cost that leads to a high monopoly profit . The verb monopolise or monopolize refers to

5160-400: Is a theoretical construct, advances in information technology and micromarketing may bring it closer to the realm of possibility. Partial price discrimination can cause some customers who are inappropriately pooled with high price customers to be excluded from the market. For example, a poor student in the U.S. might be excluded from purchasing an economics textbook at the U.S. price, which

5289-681: Is defined by the total gains from trade, the monopoly setting is less efficient than perfect competition. It is often argued that monopolies tend to become less efficient and less innovative over time, becoming "complacent", because they do not have to be efficient or innovative to compete in the marketplace. Sometimes this very loss of psychological efficiency can increase a potential competitor's value enough to overcome market entry barriers, or provide incentive for research and investment into new alternatives. The theory of contestable markets argues that in some circumstances (private) monopolies are forced to behave as if there were competition because of

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5418-417: Is important information for one to remember when considering the monopoly model diagram (and its associated conclusions) displayed here. The result that monopoly prices are higher, and production output lesser, than a competitive company follow from a requirement that the monopoly not charge different prices for different customers. That is, the monopoly is restricted from engaging in price discrimination (this

5547-401: Is known as the "revolution in monopoly theory". A monopolist can extract only one premium, and getting into complementary markets does not pay. That is, the total profits a monopolist could earn if it sought to leverage its monopoly in one market by monopolizing a complementary market are equal to the extra profits it could earn anyway by charging more for the monopoly product itself. However,

5676-400: Is not perfect. Regulators must estimate average costs. Companies have a reduced incentive to lower costs. Regulation of this type has not been limited to natural monopolies. Average-cost pricing does also have some disadvantages. By setting price equal to the intersection of the demand curve and the average total cost curve, the firm's output is allocatively inefficient as the price is less than

5805-400: Is problematic. Fragmenting such monopolies is by definition inefficient. The most frequently used methods dealing with natural monopolies are government regulations and public ownership. Government regulation generally consists of regulatory commissions charged with the principal duty of setting prices. Natural monopolies are synonymous with what is called "single-unit enterprise", a term which

5934-448: Is termed first degree price discrimination , such that all customers are charged the same amount). If the monopoly were permitted to charge individualised prices (this is termed third degree price discrimination ), the quantity produced, and the price charged to the marginal customer, would be identical to that of a competitive company, thus eliminating the deadweight loss ; however, all gains from trade (social welfare) would accrue to

6063-621: Is that typically a monopoly selects a higher price and lesser quantity of output than a price-taking company; again, less is available at a higher price. A monopoly chooses that price that maximizes the difference between total revenue and total cost. The basic markup rule (as measured by the Lerner index ) can be expressed as P − M C P = − 1 E d {\displaystyle {\frac {P-MC}{P}}={\frac {-1}{E_{d}}}} , where E d {\displaystyle E_{d}}

6192-560: Is the only market form in which price discrimination would be impossible (a perfectly competitive company has a perfectly elastic demand curve and has no market power). There are three forms of price discrimination. First degree price discrimination charges each consumer the maximum price the consumer is willing to pay. Second degree price discrimination involves quantity discounts. Third degree price discrimination involves grouping consumers according to willingness to pay as measured by their price elasticities of demand and charging each group

6321-535: Is the price elasticity of demand the firm faces. The markup rules indicate that the ratio between profit margin and the price is inversely proportional to the price elasticity of demand. The implication of the rule is that the more elastic the demand for the product the less pricing power the monopoly has. Market power is the ability to increase the product's price above marginal cost without losing all customers. Perfectly competitive (PC) companies have zero market power when it comes to setting prices. All companies of

6450-517: Is to identify customers by their willingness to pay. The purpose of price discrimination is to transfer consumer surplus to the producer. Consumer surplus is the difference between the value of a good to a consumer and the price the consumer must pay in the market to purchase it. Price discrimination is not limited to monopolies. Market power is a company's ability to increase prices without losing all its customers. Any company that has market power can engage in price discrimination. Perfect competition

6579-441: Is upon every occasion the highest which can be got. The natural price, or the price of free competition, on the contrary, is the lowest which can be taken, not upon every occasion indeed, but for any considerable time together. The one is upon every occasion the highest which can be squeezed out of the buyers, or which it is supposed they will consent to give; the other is the lowest which the sellers can commonly afford to take, and at

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6708-605: The Commonwealth because of its apartheid policies at the time. In 1973, postcodes were introduced to facilitate automated mail sorting and standardised letters were introduced later that year. In 1994, South Africa was readmitted to the Universal Postal Union following the end of minority rule. SAPO currently operates under a 25-year license granted by the Independent Communication Authority of South Africa (ICASA) and as such must provide

6837-663: The English Channel . By 1919, there was a regular motor car service, and a regular air-mail service was introduced the same year. The first overseas air-mail service was introduced in 1932, and the Springbok Air Service was introduced between the Union of South Africa and Britain in 1945. The first definitive stamp series of the Republic of South Africa was issued on 31 May 1961 after South Africa withdrew from

6966-576: The Han dynasty (206 BCE – 220 CE), who had relay stations every 30 li (about 15km) along major routes. The Tang dynasty (618 to 907 AD) operated a recorded 1,639 posthouses, including maritime offices, employing around 20,000 people. The system was administered by the Ministry of War and private correspondence was forbidden from the network. The Ming dynasty (1368 to 1644) sought a postal system to deliver mail quickly, securely, and cheaply. Adequate speed

7095-531: The Middle English word male , referring to a travelling bag or pack. It was spelled in that manner until the 17th century and is distinct from the word male . The French have a similar word, malle , for a trunk or large box, and mála is the Irish term for a bag. In the 17th century, the word mail began to appear as a reference for a bag that contained letters: "bag full of letter" (1654). Over

7224-475: The U.S. Postal Service authorised the first tests of a secure system of sending digital franks via the Internet to be printed out on a PC printer, obviating the necessity to license a dedicated franking machine and allowing companies with smaller mail programs to make use of the option; this was later expanded to test the use of personalized postage. The service provided by the U.S. Postal Service in 2003 allows

7353-648: The Wodeyar dynasty (1399–1947) of the Kingdom of Mysore used mail service for espionage purposes thereby acquiring knowledge related to matters that took place at great distances. By the end of the 18th century, a postal system in India was in operation. Later this system underwent complete modernization when the British Raj established its control over most of India. The Post Office Act XVII of 1837 provided that

7482-427: The process by which a company gains the ability to raise prices or exclude competitors. In economics, a monopoly is a single seller. In law, a monopoly is a business entity that has significant market power, that is, the power to charge overly high prices, which is associated with unfair price raises . Although monopolies may be big businesses, size is not a characteristic of a monopoly. A small business may still have

7611-568: The August Revolution, the Post and Wireless Office was renamed the Post Office under the Ministry of Transportation. In 1955, the Post Office was upgraded to the Ministry of Post. Some Chinese sources claim mail or postal systems dating back to the Xia or Shang dynasties , which would be the oldest mailing service in the world. The earliest credible system of couriers was initiated by

7740-684: The Governor-General of India in Council had the exclusive right of conveying letters by post for hire within the territories of the East India Company. The mails were available to certain officials without charge, which became a controversial privilege as the years passed. On this basis the Indian Post Office was established on October 1, 1837. The first well-documented postal service was that of Rome . Organized at

7869-631: The U.K., the Royal Mail delivers the post , while in North America both the U.S. Postal Service and Canada Post deliver the mail . The term email , short for "electronic mail", first appeared in the 1970s. The term snail mail is a retronym to distinguish it from the quicker email. Various dates have been given for its first use. The practice of communication by written documents carried by an intermediary from one person or place to another almost certainly dates back nearly to

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7998-489: The United States Postal Service's experiment with rocket mail . Receipt services were made available in order to grant the sender a confirmation of effective delivery. Before about the mid-nineteenth century, in regions where postal systems existed, the payment models varied, but most mail was sent unpaid requiring the recipient to pay the postage fee. In some regions a partial payment was made by

8127-490: The United States, postcodes in the United Kingdom and Australia, eircodes in Ireland and postal codes in most other countries) in order to facilitate the automation of operations. This also includes placing additional marks on the address portion of the letter or mailed object, called "bar coding". Bar coding of mail for delivery is usually expressed either by a series of vertical bars, usually called POSTNET coding or

8256-638: The acting governor of the Cape, Johan Isaac Rhenius , opened a post office in a room next to the pantry at the Castle of Good Hope in Cape Town . This was the start of what became the South African Post Office (SAPO). By 1805, there was a regular inland mail service between Algoa Bay and False Bay in the Cape, using farmers on horseback. A mail wagon ran twice a week between Cape Town and

8385-459: The agent usually indicates by means of a cancellation that it is no longer valid for pre-payment of postage. The exceptions are when the agent forgets or neglects to cancel the mailpiece, for stamps that are pre-cancelled and thus do not require cancellation and for, in most cases, metered mail. (The "personalized stamps" authorized by the USPS and manufactured by Zazzle and other companies are in fact

8514-403: The average cost of production "declines throughout the relevant range of product demand". The relevant range of product demand is where the average cost curve is below the demand curve. When this situation occurs, it is always more efficient for one large company to supply the market than multiple smaller companies; in fact, absent government intervention in such markets, will naturally evolve into

8643-467: The case that at the profit-maximizing quantity MR and MC are less than price, which further implies that a monopoly produces less quantity at a higher price than if the market were perfectly competitive. The fact that a monopoly has a downward-sloping demand curve means that the relationship between total revenue and output for a monopoly is much different from that of competitive companies. Total revenue equals price times quantity. A competitive company has

8772-558: The companies interact strategically. In general, the main results from this theory compare the price-fixing methods across market structures, analyze the effect of a certain structure on welfare, and vary technological or demand assumptions in order to assess the consequences for an abstract model of society. Most economic textbooks follow the practice of carefully explaining the "perfect competition" model, mainly because this helps to understand departures from it (the so-called "imperfect competition" models). The boundaries of what constitutes

8901-512: The conditions for physical mail. Email (and in recent years social networking sites) became a fierce competitor to physical mail systems, but online auctions and Internet shopping opened new business opportunities as people often get items bought online through the mail. Modern mail is organized by national and privatized services, which are reciprocally connected by international regulations, organizations and international agreements. Paper letters and parcels can be sent to almost any country in

9030-682: The country and therefore has a presence in almost every single town and city in South Africa. Nomkhita Mona joined the SA Post Office in April 2021 as group CEO. Its main subsidiary is Postbank, a financial services provider. The history of postal services in Southern Africa can be traced back over 500 years. In 1500, the captain of a Portuguese ship, Petro D'Ataide , placed a letter in a milkwood tree at Mossel Bay . He reported

9159-652: The development of a real postal system comes from Ancient Persia . The best-documented claim ( Xenophon ) attributes the invention to the Persian King Cyrus the Great (550 BCE), who mandated that every province in his kingdom would organize reception and delivery of post to each of its citizens. Other writers credit his successor Darius I of Persia (521 BCE). Other sources claim much earlier dates for an Assyrian postal system, with credit given to Hammurabi (1700 BCE) and Sargon II (722 BCE). Mail may not have been

9288-501: The enormous funding necessary to rapidly industrialize Japan in the late 19th century. The postal service was one of Korea's first attempts at modernization. The Joseon Post Office was established in 1884. Another important postal service was created in the Islamic world by the caliph Mu'awiyya; the service was called barid , for the name of the towers built to protect the roads by which couriers travelled. By 3000 BC, Egypt

9417-414: The extremes of market structures there is some similarity. The cost functions are the same. Both monopolies and perfectly competitive (PC) companies minimize cost and maximize profit. The shutdown decisions are the same. Both are assumed to have perfectly competitive factors markets. There are distinctions; some of the most important are as follows: The most significant distinction between a PC company and

9546-407: The first unit for $ 17 the second unit for $ 14 and so on which is listed in the table below. Total revenue would be $ 55, his total cost would be $ 25 and his profit would be $ 30. Several things are worth noting. The monopolist acquires all the consumer surplus and eliminates practically all the deadweight loss because he is willing to sell to anyone who is willing to pay at least the marginal cost. Thus

9675-400: The form of price control is necessary as it helped efficient market. To reduce prices and increase output, regulators often use average cost pricing. By average cost pricing, the price and quantity are determined by the intersection of the average cost curve and the demand curve. This pricing scheme eliminates any positive economic profits since price equals average cost. Average-cost pricing

9804-405: The franks to be printed out on special adhesive-backed labels. In 2004 the Royal Mail in the United Kingdom introduced its SmartStamp Internet-based system, allowing printing on ordinary adhesive labels or envelopes. Similar systems are being considered by postal administrations around the world. When the pre-paid envelope or package is accepted into the mail by an agent of the postal service,

9933-429: The generally poorer Ethiopian economics students. Similarly, most patented medications cost more in the U.S. than in other countries with a (presumed) poorer customer base. Typically, a high general price is listed, and various market segments get varying discounts. This is an example of framing to make the process of charging some people higher prices more socially acceptable. Perfect price discrimination would allow

10062-511: The group is financial services which it offers through its savings banks that operates under the name Postbank. The Postbank itself was formed in 1910 and is the largest savings bank in the country. More than 6 million customers have accounts with Postbank making it one of the largest banks in South Africa as measured by customer number. The Postbank is a deposit taking institution only, and thus does not offer credit products, only savings and investment products. The South African Post Office has, for

10191-404: The groups revenue in 2010/12. In the 2010/11 financial year nearly 1.5 billion mail pieces were processed. To process and distribute this volume of mail items the group operates 6 large mail centres and more than 40 depots across the republic. The group has, however, suffered a decline in traditional mail volumes over the last 3 years. This decline is in line with similar declines experienced by

10320-474: The invention of writing . However, the development of formal postal systems occurred much later. The first documented use of an organized courier service for the dissemination of written documents is in Egypt , where Pharaohs used couriers to send out decrees throughout the territory of the state (2400 BCE). The earliest surviving piece of mail is also Egyptian, dating to 255 BCE. The first credible claim for

10449-468: The inverse demand curve is of the form x = a − b y {\displaystyle x=a-by} . Then the total revenue curve is TR = a y − b y 2 {\displaystyle {\text{TR}}=ay-by^{2}} and the marginal revenue curve is thus MR = a − 2 b y {\displaystyle {\text{MR}}=a-2by} . From this several things are evident. First,

10578-400: The last postmaster, Maximilian Karl, 6th Prince of Thurn and Taxis , into real estate, most of it continuing to exist today. The Phone Book of the World has its roots in the long history of the avant-garde telecommunications family Thurn & Taxis. The directory is the result of Johannes, 11th Prince of Thurn & Taxis transmitting PTT culture to a student and helping with the opening of

10707-428: The mail and packages often surveyed and their contents sometimes edited out (or even in). There have been cases over the millennia of governments opening and copying or photographing the contents of private mail. Subject to the laws in the relevant jurisdiction, correspondence may be openly or covertly opened, or the contents determined via some other method, by the police or other authorities in some cases relating to

10836-477: The mail service. Foreign observers, such as Marco Polo , have attested to the efficiency of this early postal system. Each station was maintained by up to twenty five families. Work for postal service counted as military service. The system was still operational in 18th century when 64 stations were required for a message to cross Mongolia from the Altai Mountains to China. The modern Japanese system

10965-473: The majority of postal operators across the world as traditional mail as a communication medium is substituted by electronic alternatives such as email and more recently cell phones. In 2021 the parcel delivery both locally and internationally is unreliable and delays of more than six months are common. Overseas Christmas cards normally reach their destination in March. In an attempt to regain lost market share of

11094-466: The marginal cost (which is the output quantity for a perfectly competitive and allocatively efficient market). In 1848, J.S. Mill was the first individual to describe monopolies with the adjective "natural". He used it interchangeably with "practical". At the time, Mill gave the following examples of natural or practical monopolies: gas supply, water supply, roads, canals, and railways. In his Social Economics , Friedrich von Wieser demonstrated his view of

11223-587: The marginal revenue curve has the same x {\displaystyle x} -intercept as the inverse demand curve. Second, the slope of the marginal revenue curve is twice that of the inverse demand curve. What is not quite so evident is that the marginal revenue curve is below the inverse demand curve at all points ( y ≥ 0 {\displaystyle y\geq 0} ). Since all companies maximise profits by equating MR {\displaystyle {\text{MR}}} and MC {\displaystyle {\text{MC}}} it must be

11352-603: The message carrier (called Chapar ) would ride to the next post, whereupon he would swap his horse with a fresh one for maximum performance and delivery speed. Herodotus described the system in this way: "It is said that as many days as there are in the whole journey, so many are the men and horses that stand along the road, each horse and man at the interval of a day's journey; and these are stayed neither by snow nor rain nor heat nor darkness from accomplishing their appointed course with all speed". The verse prominently features on New York's James Farley Post Office , although it uses

11481-401: The monopolist and none to the consumer. In essence, every consumer would be indifferent between going completely without the product or service and being able to purchase it from the monopolist. As long as the price elasticity of demand for most customers is less than one in absolute value , it is advantageous for a company to increase its prices: it receives more money for fewer goods. With

11610-445: The monopolist to charge each customer the exact maximum amount they would be willing to pay. This would allow the monopolist to extract all the consumer surplus of the market. A domestic example would be the cost of airplane flights in relation to their takeoff time; the closer they are to flight, the higher the plane tickets will cost, discriminating against late planners and often business flyers. While such perfect price discrimination

11739-562: The next hundred years the word mail began to be applied strictly to the letters themselves and the sack as the mailbag . In the 19th century, the British typically used mail to refer to letters being sent abroad (i.e. on a ship) and post to refer to letters for domestic delivery. The word Post is derived from Old French poste , which ultimately stems from the past participle of the Latin verb ponere 'to lay down or place'. So in

11868-402: The one monopoly profit theorem is not true if customers in the monopoly good are stranded or poorly informed, or if the tied good has high fixed costs. A pure monopoly has the same economic rationality of perfectly competitive companies, i.e. to optimise a profit function given some constraints. By the assumptions of increasing marginal costs, exogenous inputs' prices, and control concentrated on

11997-715: The postal business based in Brussels and in Frankfurt was passed from one generation to another. Following the abolition of the Empire in 1806, the Thurn-und-Taxis Post system continued as a private organization into the postage stamp era before being absorbed into the postal system of the new German Empire after 1871. 1867 July 1 the State of Prussia had to make a compensation payment of 3.000.000 Thalers reinvested by Helene von Thurn & Taxis , daughter-in-law of

12126-471: The postal delivery market, the Post Office proposed that legislation be passed requiring that all packages weighing 1kg or less be delivered by it. If passed, this would give the Post Office a government enforced monopoly over the delivery of small packages. The South African Post Office has been plagued by employee thefts of goods and parcels. This has resulted in the termination of employment and prosecution of postal workers. The second largest activity of

12255-508: The postal service as a natural monopoly: "In the face of [such] single-unit administration, the principle of competition becomes utterly abortive. The parallel network of another postal organization, beside the one already functioning, would be economically absurd; enormous amounts of money for plant and management would have to be expended for no purpose whatever." Overall, most monopolies are man-made monopolies, or unnatural monopolies, not natural ones. A government-granted monopoly (also called

12384-445: The power to raise prices in a small industry (or market). A monopoly may also have monopsony control of a sector of a market. A monopsony is a market situation in which there is only one buyer. Likewise, a monopoly should be distinguished from a cartel (a form of oligopoly), in which several providers act together to coordinate services, prices or sale of goods. Monopolies, monopsonies and oligopolies are all situations in which one or

12513-426: The power to set prices or quantities although not both. A monopoly is a price maker. The monopoly is the market and prices are set by the monopolist based on their circumstances and not the interaction of demand and supply. The two primary factors determining monopoly market power are the company's demand curve and its cost structure. Market power is the ability to affect the terms and conditions of exchange so that

12642-455: The price discrimination promotes efficiency. Secondly, by the pricing scheme price = average revenue and equals marginal revenue. That is the monopolist behaving like a perfectly competitive company. Thirdly, the discriminating monopolist produces a larger quantity than the monopolist operating by a uniform pricing scheme. Successful price discrimination requires that companies separate consumers according to their willingness to buy. Determining

12771-403: The price of a product is set by a single company (price is not imposed by the market as in perfect competition). Although a monopoly's market power is great it is still limited by the demand side of the market. A monopoly has a negatively sloped demand curve, not a perfectly inelastic curve. Consequently, any price increase will result in the loss of some customers. Price discrimination allows

12900-454: The primary mission of this postal service, however. The role of the system as an intelligence gathering apparatus is well documented, and the service was (later) called angariae , a term that in time came to indicate a tax system. The Old Testament ( Esther , VIII) makes mention of this system: Ahasuerus , king of Medes , used couriers for communicating his decisions. The Persian system worked using stations (called Chapar-Khaneh ), whence

13029-453: The product or service less than its price, monopoly pricing creates a deadweight loss referring to potential gains that went neither to the monopolist nor to consumers. Deadweight loss is the cost to society because it is inefficient. Given the presence of this deadweight loss, the combined surplus (or wealth) for the monopolist and consumers is necessarily less than the total surplus obtained by consumers by perfect competition. Where efficiency

13158-411: The public. Common chariots called Dagana were sometimes used as mail chariots in ancient India. Couriers were used militarily by kings and local rulers to deliver information through runners and other carriers. The postmaster, the head of the intelligence service, was responsible for ensuring the maintenance of the courier system. Couriers were also used to deliver personal letters. In South India ,

13287-417: The recipient and the cost was determined by the distance from sender to recipient and the number of sheets of paper rather than by a countrywide flat rate with weight restrictions. Sir Rowland Hill reformed the postal system based on the concepts of penny postage and prepayment. In his proposal, Hill also called for official pre-printed envelopes and adhesive postage stamps as alternative ways of getting

13416-641: The recording of identities of sender and recipient. The privacy of correspondence is guaranteed by the constitutions of Mexico , Colombia , Brazil and Venezuela , and is alluded to in the European Convention on Human Rights and the Universal Declaration of Human Rights . The control of the contents inside private citizens' mail is censorship and concerns social, political, and legal aspects of civil rights . International mail and packages are subject to customs control, with

13545-490: The revenue maximizing quantity for the monopoly is 12.5 units and the revenue-maximizing price is 25. A company with a monopoly does not experience price pressure from competitors, although it may experience pricing pressure from potential competition. If a company increases prices too much, then others may enter the market if they are able to provide the same good, or a substitute, at a lesser price. The idea that monopolies in markets with easy entry need not be regulated against

13674-412: The risk of losing their monopoly to new entrants. This is likely to happen when a market's barriers to entry are low. It might also be because of the availability in the longer term of substitutes in other markets. For example, a canal monopoly, while worth a great deal during the late 18th century United Kingdom, was worth much less during the late 19th century because of the introduction of railways as

13803-445: The same time continue their business. ...Monopoly, besides, is a great enemy to good management. – Adam Smith (1776), The Wealth of Nations According to the standard model, in which a monopolist sets a single price for all consumers, the monopolist will sell a lesser quantity of goods at a higher price than would companies by perfect competition . Because the monopolist ultimately forgoes transactions with consumers who value

13932-406: The seller divides the consumers into different groups according to their willingness to pay as measured by their price elasticity of demand. Each group of consumers effectively becomes a separate market with its own demand curve and marginal revenue curve. The firm then attempts to maximize profits in each segment by equating MR and MC, Generally the company charges a higher price to the group with

14061-538: The sender to pay for the postage, at a time when prepayment was optional, which led to the invention of the postage stamp, the Penny Black . The postal system was important in the development of modern transportation. Railways carried railway post offices . During the 20th century, air mail became the transport of choice for inter-continental mail. Postmen started to use mail trucks . The handling of mail became increasingly automated. The Internet came to change

14190-435: The sender. Today, worldwide, the most common method of prepaying postage is by buying an adhesive postage stamp to be applied to the envelope before mailing; a much less common method is to use a postage-prepaid envelope . Franking is a method of creating postage-prepaid envelopes under licence using a special machine. They are used by companies with large mail programs, such as banks and direct mail companies. In 1998,

14319-576: The sinking of three ships in his fleet, including that of Bartolomeu Dias , during a heavy storm over the Atlantic Ocean. Portuguese ships regularly stopped at Mossel Bay to take on fresh water, and three months later, the letter was found and delivered to Portugal . Sailors travelling to or from the Orient past the south coast of Africa, placed letters under postal stones, hoping that they would be found and delivered by other ships. On 2 March 1792

14448-648: The student may have been able to purchase at the Ethiopian price. Similarly, a wealthy student in Ethiopia may be able to or willing to buy at the U.S. price, though naturally would hide such a fact from the monopolist so as to pay the reduced third world price. These are deadweight losses and decrease a monopolist's profits. Deadweight loss is considered detrimental to society and market participation. As such, monopolists have substantial economic interest in improving their market information and market segmenting . There

14577-430: The study of management structures, which directly concerns normative aspects of economic competition, and provides the basis for topics such as industrial organization and economics of regulation . There are four basic types of market structures in traditional economic analysis: perfect competition , monopolistic competition , oligopoly and monopoly. A monopoly is a structure in which a single supplier produces and sells

14706-442: The team. The three basic forms of price discrimination are first, second and third degree price discrimination. In first degree price discrimination the company charges the maximum price each customer is willing to pay. The maximum price a consumer is willing to pay for a unit of the good is the reservation price. Thus for each unit the seller tries to set the price equal to the consumer's reservation price. Direct information about

14835-433: The time of Augustus Caesar (62 BCE – 14 CE), the service was called cursus publicus and was provided with light carriages ( rhedæ ) pulled by fast horses. By the time of Diocletian , a parallel service was established with two-wheeled carts ( birotæ ) pulled by oxen . This service was reserved for government correspondence. Yet another service for citizens was later added. In 1802, the first Vietnamese postal service

14964-461: The town of Stellenbosch. In 1806, Sir David Baird ruled that Khoi, enslaved indigenous people of the Cape, would be used to convey letters and small packages. A mail boat service was introduced between England and the Cape in 1815 and in 1848, the then Transvaal government appointed postmen to transport official mail. Prior to this development mail had been sent by special messenger, or by any available transport. The first stamp issued in South Africa

15093-480: The translation "Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds". The economic growth and political stability under the Mauryan Empire (322–185 BCE) stimulated sustained development of civil infrastructure in ancient India . The Mauryans developed early Indian mail service as well as public wells, rest houses, and other facilities for

15222-487: The transport of foreign and domestic tribute specifically and the conduct of trade in general. By the end of Kublai Khan's rule, there were more than 1400 postal stations in China alone, which in turn had at their disposal about 50,000 horses, 1,400 oxen, 6,700 mules, 400 carts, 6,000 boats, more than 200 dogs, and 1,150 sheep. The stations were 25 to 65 km (16 to 40 mi) apart and had reliable attendants working for

15351-407: The venture for itself, thus forming a government monopoly , for example with a state-owned company . Monopolies may be naturally occurring due to limited competition because the industry is resource intensive and requires substantial costs to operate (e.g., certain railroad systems). Market structure is determined by following factors: In economics, the idea of monopolies is important in

15480-561: The whole territory of his empire the system used by Franks in northern Gaul and connected this service with that of missi dominici . In the mid-11th century, flax traders known as the Cairo Geniza Merchants from Fustat , Egypt wrote about using a postal service known as the kutubi. The kutubi system managed routes between the cities of Jerusalem, Ramla, Tyre, Ascalon, Damascus, Aleppo, and Fustat with year-round, regular mail delivery. Many religious orders had

15609-489: The world relatively easily and cheaply. The Internet has made the process of sending letter-like messages nearly instantaneous, and in many cases and situations correspondents use email where they previously would have used letters. The volume of paper mail sent through the U.S. Postal Service has declined by more than 15% since its peak at 213 billion pieces per annum in 2006. Some countries have organized their mail services as public limited liability corporations without

15738-454: Was always a problem, because of the slow overland transportation system, and underfunding. Its network had 1,936 posthouses every 60 li along major routes, with fresh horses available every 10 li between them. The Qing operated 1,785 posthouses throughout their lands. More efficient, however, was the system linking the international settlements, centered around Shanghai and the Treaty ports. It

15867-478: Was developed in the mid-19th century, closely copying European models. Japan was highly innovative in developing the world's largest and most successful postal savings system and later a postal life insurance system as well. Postmasters play a key role in linking the Japanese political system to local politics. The postmasters are high prestige, and are often hereditary. To a large extent, the postal system generated

15996-505: Was established under the Nguyen dynasty , under the Ministry of Rites. During the Nguyen dynasty, official documents were transported by horse and other primitive means to stations built about 25-30 kilometers apart. In 1904, three wireless communication offices were established, and in early 1906 they were merged with the postal service to form the Post and Wireless Office. In 1945, after

16125-525: Was sent to London as a normal recorded postal article. Mail was transported by motor car for the first time in 1911, and SAPO experimented using camels to deliver mail, replacing them with an ox cart service in 1914. In December 1911, the first air mail delivery took place with a seven-and-a-half minute flight from Kenilworth in Cape Town to Muizenberg. The mail was carried in the same model of aircraft as that used two years earlier by Louis Bleriot to cross

16254-523: Was the Cape Triangular stamp introduced in 1853. The stamp has two values – the four pence blue and the one penny red. In 1860, the first postboxes were erected in the Cape and several railway lines were completed and used to transport mail. The first mail train was introduced in 1883. In 1867, diamonds were discovered in South Africa, and in 1905, the largest diamond in the world, the Cullinan,

16383-611: Was the main communication system for China's international trade. Genghis Khan installed an empire-wide messenger and postal station system named Örtöö within the Mongol Empire . During the Yuan dynasty under Kublai Khan , this system also covered the territory of China. Postal stations were used not only for the transmission and delivery of official mail but were also available for travelling officials, military men, and foreign dignitaries. These stations aided and facilitated

16512-508: Was used in the 1914 book Social Economics written by Friedrich von Wieser. As mentioned, government regulations are frequently used with natural monopolies to help control prices. An example that can illustrate this can be found when looking at the United States Postal Service, which has a monopoly over types of mail. According to Wieser, the idea of a competitive market within the postal industry would lead to extreme prices and unnecessary spending, and this highlighted why government regulation in

16641-438: Was using homing pigeons for pigeon post , taking advantage of a singular quality of this bird, which when taken far from its nest is able to find its way home due to a particularly developed sense of orientation. Messages were then tied around the legs of the pigeon, which was freed and could reach its original nest. By the 19th century, homing pigeons were used extensively for military communications. Charlemagne extended to

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