Legal Monopoly

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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".

BREAKING DOWN '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..

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RELATED FAQS
  1. Has deregulation helped or hurt the profitability of companies in the telecommunications ...

    Deregulation is almost always a double-edged sword in terms of business profitability. The profits of legally protected monopolies ... Read Full Answer >>
  2. How does the landscape of the telecommunications sector in the U.S. compare to Canada?

    From a global perspective, there are more similarities than differences between the telecommunications sectors in the United ... Read Full Answer >>
  3. Which segments of the telecommunications sector have the toughest competition?

    The most significant competition takes place between large integrated wireless and wireline companies, such as AT&T, ... Read Full Answer >>
  4. 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 >>
  5. 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 >>
  6. 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 >>
  7. 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 >>
  8. How are major Internet service providers (ISP) preventing new startups?

    The Internet sector is a dynamic, fast-changing and increasingly competitive space. Even though some Internet service providers ... Read Full Answer >>
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    Profits in utilities range dramatically from country to country and region to region. This is partly due to barriers to entry ... Read Full Answer >>
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    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 >>

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