Economics 1st Edition by Dean Karlan,Jonathan Morduch

Exercise 18

The United States Postal Service (USPS) has a government monopoly on home mail delivery, but several private companies, such as FedEx, UPS, and DHL, compete with the USPS for other types of delivery service. Describe the differences in producer and consumer surplus, and in overall social welfare, that would occur in each of the following scenarios.
a. The USPS has a monopoly on every type of mail or package.
b. Consumers are allowed to choose between USPS, UPS, FedEx, and DHL for home mail delivery.
c. There are an infinite number of local and national mail providers.