The present paper investigates where a monopoly postal company locates its offices using two regional models focusing on three factors. The first factor is a disutility for resident where the postal office does not exist to move between regions. Second factor is the costs to construct a branch office. The final factor is a quality. Based on these factors, we consider whether it is socially optimal if postal branch offices are eliminated. The results demonstrated that the monopoly postal company locates the postal branch office to maximize its own profits and minimize its costs. Whether this action is socially optimal or not depends on a marginal cost to quality, the distance between regions, and the costs of construction. In other words, these factors determine whether the monopoly postal office has strong or weak incentives to locate a branch office where it exists.
JEL Classification: R39, L12