"Roger Smith" wrote in message
...

"Steve Frazer" wrote in message
...
"Victor Manta" wrote in message
...
wrote in message
oups.com...
Because the USPS is facing decreasing revenue from mailing, I
believe a
possible solution may be to re-introduce some stamps that may
be used
for everyday and special occasions at a special rate, say three
to five
cents less than first class postage.
snip for brevity

I don't understand how by charging less for its service the USPS
will
increase its revenue.

Could you eventually ellaborate?

Buy reducing price you increase demand. Increase price you lessen
demand.
The million dollar question is whether you will gain enough more
custom to
offset the reduce income from charging less.
--


Steve Frazer

http://homepage.ntlworld.com/steve_frazer/index.html
(updated Jan 31 '05)

It depends of course on whether the product is price-sensitive, as
it would
be in a competitive market.

I doubt if I would send more Christmas cards if the cost of posting
them was
less, just as I would probably grumble but still send the same cards
if the
Post Office increased the price. For essential mail the items get
posted
whatever the postage levied, within reason.

But times have changed of course and increasing levels of
communication are
carried out instantaneously by fax and email, so that postal
services
represent an ever-smaller proportion of the communications business
and,
being labour-intensive, will probably have to increase their prices
in real
terms to maintain the same financial position.

I am now waiting for a professional economist to contradict this.

And that same economist might comment on whether the junk mail
handling leads to a profit or a loss.

Franz