Should government-run monopoloies like liquor stores make a profit?

Question

why or why not?

Answer 1

Sure they should but "State Stores" are not the norm everywhere. In Pennsylvania, the state runs them, but in Georgia, they are privately owned.

Answer 2

Thinking of going into the liquor biz,
or is this just a homework assignment? ;)

The classic, economic, definition of "monopoly" is a service or industry which is controlled by one person or group; the "monopoly" may be on the selling or buying end, or, potentially, both, for that given industry. Any profits are kept within the monopoly holders (i.e., they are not distributed to public shareholders or the public in general).

Although the gov't controls liquor prices and licenses (as it does virtually everything else!) in every State, it does not control the level of profit the store can make. That depends on the store owner, the location, the cost of doing business (i.e., rent, utilities, licensing, etc, the "traffic" (i.e., the number of customers going "through" the store and, hopefully, making purchases)), etc. Thus, there is no true monopoly.

It wouldn't make much sense for either the gov't or the store owner to not make a profit, would it? Low profit means low taxable income for the State, and, potentially, the owner going out of business! So, of course, the gov't isn't going to prohibit profits! Of course, if the owner hides income, then that becomes tax evasion, and that's a whole other kettle of moonshine! ;)

Anyone can open a liquor store (or most any other kind of store), at least in the USA, provided that they meet certain requirements for that establishment, including applicable zoning laws, "blue" laws, not selling to minors, etc. The gov't is simply applying licensing and price and/or tax controls to an industry, much as it does for virtually every other industry. Now, if the gov't physically owned and ran the liquor stores, then you might consider it a monopoly, because, then, only gov't employees could "own" the stores, not private citizens, as is currently the case (in some States, the running of motor vehicle inspection stations is State run, which may be considered a monopoly, but, it has the benefit of giving car owner's "honest" appraisals of their vehicle's fitness (i.e., you can't go to your buddy down the street to get a "free" ride, but, conversely, you won't be gouged with phony and expensive problems). However, in the liquor industry, nobody is forcing anyone to buy those goods, so there is no "stranglehold" on the public, and, thus, any monopoly and subsequent profits would shrivel to nothing, if nobody bought the stuff!

Given that liquor is considered a "sinful" industry, available only to adults, it is probably for the best that the gov't apply some controls to it. Likewise, with public education, which is paid by citizens' taxes, and is run by the gov't; is it a monopoly? No, because there are alternatives (i.e., parochial; private; home schooling), and each school is free to select its own curriculum, within community and State standards. Is it free to make a profit? Yes, but not all schools receive equal sums, due to enrollment, staffing, location, etc.

Given all the above, I don't consider the liquor industry a monopoly, and liquor stores are not prohibited from making a profit (look at it this way: if there was little or no profit to be had from owning/running a liquor store, why would anyone do it???).

Answer 3

Sure. the alternative would be your tax dollars going to subsidize them.
If you drink and/or buy liquor, you shouldn't be against paying a few cents extra to help the store generate a profit. You do when you buy something everywhere else.