Examples
The term has been used in relation to the concept of school vouchers in which it is claimed that the vouchers could be used by parents of "better" students (i.e., students with above average grades who are not disciplinary risks) to move them out of lower performing or substandard state schools and into less-crowded private ones, leaving the "worse" students (i.e., students with learning disabilities or who are troublemakers) behind in the state schools, making the situation worse.
For example, it was believed that MCI and Sprint long distance telephone companies would end up taking away very high value business and some residential accounts from AT&T, leaving AT&T primarily with higher-cost to service accounts or ones producing less revenue (such as customers in less-densely populated or rural areas), meaning all customers of AT&T would end up paying more. This could conceivably lead to a vicious circle as more customers leave the high-price carrier for the lower priced carrier, thus forcing still more price increases to cover the upward spiraling costs of providing service to a shrinking revenue base. This scenario did not occur, as various technological changes (spurred in part by the availability of competition) eventually lowered the net cost for most long-distance telephone calls.
The United States Postal Service has a monopoly on the delivery of "non-urgent" first-class mail, where delivery is not time-sensitive. It also has the exclusive right to use customer-owned mail boxes for placing the customer's mail for delivery. This means that, even though mail boxes, such as those in the door of a house, or on the curb, or in the front lobby of the customer's building, are owned by the customer, and not owned by the Postal Service, by law only the Postal Service may use them to deliver mail. This law is in effect because it is believed that were the Postal Service to not have this monopoly, other competing mail carriers would take over the most lucrative parts of the business (e.g. local delivery of bills in dense urban areas), leaving the Postal Service with more expensive urban deliveries and rural service.
Read more about this topic: Cream Skimming
Famous quotes containing the word examples:
“It is hardly to be believed how spiritual reflections when mixed with a little physics can hold people’s attention and give them a livelier idea of God than do the often ill-applied examples of his wrath.”
—G.C. (Georg Christoph)
“Histories are more full of examples of the fidelity of dogs than of friends.”
—Alexander Pope (1688–1744)