Here is an article about the price of stamps.
Read the article and put a summary of the article, in your blog.
Then (linking to the article) answer the following questions:
a) Define price elasicity of demand
b) Using the information in the article, calculate the PED for first and second class stamps
c) What do the 2 numbers you have calculated tell you about the demand for the 2 products?
d) Why is demand for these 2 products as you have described? (Hint: Look at the factors that influence PED)
e) What advice would you give Royal mail about their pricing structure as a result of your calculations?
f) Why is ceteris paribus important when we are delaing with elasticity?
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