Legal Monopoly

AAA

DEFINITION of 'Legal Monopoly'

A company that is operating as a monopoly under a government mandate. A legal monopoly offers a specific product or service at a regulated price and can either be independently run and government regulated, or government run and regulated.

Also known as a "statutory monopoly".

INVESTOPEDIA EXPLAINS 'Legal Monopoly'

A legal monopoly is set up in the beginning as a perceived best option for both government and its citizens. For example, AT&T operated as a legal monopoly until 1982 because it was deemed vital to have cheap and reliable service for everyone. Railroads and airlines have also been operated as legal monopolies at different periods in history. In most cases, capitalism has won out over legal monopolies as technology and the economy have become more advanced..

RELATED TERMS
  1. Franchised Monopoly

    Monopoly status given by the government to a company. A franchised ...
  2. Monopolistic State Fund

    A government owned and operated fund that is set up to provide ...
  3. Renationalization

    Bringing assets and/or industries back into national-government ...
  4. Monopolistic Competition

    A type of competition within an industry where: 1. All firms ...
  5. Government-Sponsored Enterprise ...

    Privately held corporations with public purposes created by the ...
  6. Monopoly

    A situation in which a single company or group owns all or nearly ...
RELATED FAQS
  1. How does a monopoly contribute to market failure?

    According to general equilibrium economics, a monopoly can identify or create a rigid demand curve, restrict supply and cause ... Read Full Answer >>
  2. What safeguards exist to prevent the abuse of power in a market economy?

    According to free market theory, safeguards against abuse in a market economy come in several forms. Examples of non-government ... Read Full Answer >>
  3. Are monopolies always bad?

    Monopolies over a particular commodity, market or aspect of production are considered good or economically advisable in cases ... Read Full Answer >>
  4. Are there any legal monopolies in America or Europe?

    There are legal monopolies in almost every country, but their numbers are declining. For several decades the political climate ... Read Full Answer >>
  5. To what extent are the dominant players in the Internet sector preventing new startups?

    The Internet sector is a dynamic, fast-changing and increasingly competitive space. Even though some Internet service providers ... Read Full Answer >>
  6. What is the average profit margin for a utility company?

    Profits in utilities range dramatically from country to country and region to region. This is partly due to barriers to entry ... Read Full Answer >>
  7. What is a utility stock?

    A utility stock is a stock for a company that is found in the Utilities Sector. These companies include water, gas, electric ... Read Full Answer >>
Related Articles
  1. Economics

    Economics Basics

    Learn economics principles such as the relationship of supply and demand, elasticity, utility, and more!
  2. Trading Strategies

    Setting Vs. Getting: What Is A Price-Taker?

    Learn how the economic term "price taker" may separate investors from traders.
  3. Personal Finance

    Antitrust Defined

    Check out the history and reasons behind antitrust laws, as well as the arguments over them.
  4. Economics

    What Is Supply?

    Supply is the amount of goods a producer is willing to produce at a given price, and is one of the most basic concepts in economics.
  5. Economics

    What is a Management Buyout?

    A management buyout, or MBO, is a transaction where a company's management team purchases the assets and operations of the business they manage.
  6. Economics

    Modified Internal Rate of Return (MIRR)

    Modified internal rate of return (MIRR) is a variant of the more traditional internal rate of return calculation.
  7. Economics

    Explaining Cash On Delivery

    Cash on delivery, also referred to as COD, is a method of shipping goods to buyers who do not have credit terms with the seller.
  8. Credit & Loans

    What's a Revolving Line of Credit?

    A revolving line of credit is an arrangement made between a company or an individual and a bank to borrow money on a short-term basis.
  9. Economics

    Understanding Horizontal Integration

    Horizontal integration is the acquisition or internal creation of related businesses to a company’s current business focus.
  10. Economics

    Understanding Marginal Benefit

    Marginal benefit is an economic term that describes the maximum amount a consumer is willing to pay for an additional unit of a good or service.

You May Also Like

Hot Definitions
  1. Fisher Effect

    An economic theory proposed by economist Irving Fisher that describes the relationship between inflation and both real and ...
  2. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  3. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  4. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  5. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  6. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
Trading Center