The largest single price increase in stamps in over a decade for the United States Postal Service (USPS) takes effect today with pricing jumping from 46 cents a stamp to 49 cents. It will be interesting to see if the Post Office is able to buck the law of supply and demand and make more as a result of the price hike. According to that model of price determination, if demand is falling for product, increasing the price of that good will further hasten the waning demand. However, in the case of the Post Office, they believe the price increase will increase their revenue.
It is also known how much the “Forever Stamp” program will temporarily blunt the price increase. The Forever Stamp is immune to price increases. In statistics compiled in 2012, the Forever Stamp accounted for nearly 22 billion stamps sold or over 84% of stamp sales. Last year, the USPS saw total volume in letters mailed decline by 2 billion over the previous year to 66.7 billion. However, one bright spot for the beleaguered independent agency of the United States has been package shipment which have increased by 8% in 2013. Package sales generate more money on a per package basis than regular envelope mail.
postage stamp prices