A. Use the natural monopoly concept to explain why there is not a single
city in the U.S. that still supports two independently owned and evenly
matched, high-quality newspapers that vie for the same broad base of
readership.
B. On Friday January 5, 2001, Attorney General Reno gave the green light
to a 50-year joint operating agreement between News and its longtime
rival, the Post. Starting January 22, 2001, the publishing operations of
the News and the Post were consolidated. At the time the joint
operating agreement was formed, neither news organization would
speculate on job losses or advertising and circulation rate increases
from the deal. Based upon your knowledge of natural monopoly, would
you predict an increase or decrease in prices following establishment of
the joint operating agreement? Would you expect newspaper
production (and employment) to rise or fall? Why?