Stamp prices may rise next year

Stamp prices may rise again in April next year. Regulator Postcomm predicted prices for first-class stamps would rise by 3 p. to 42p. per stamp and prices for second-class stamps would rise by 2p. to 32p. per stamp. He also added that Royal Mail needed extra funding to compensate a decline in mail volumes. Regulator sad that even after rising in prices for stamps Royal Mail would still lose their money.
Stamp prices were last increased in April this year. Royal Mail has another problem. There are a lot of strikes (workers don’t want to work). This is caused by reduction in worker’s places and wages. The result of a ballot by the Communication Workers Union (CWU) calling for a nationwide strike by postal workers will be announced on either 8 or 9 October. While the CWU is demanding that Royal Mail signs an agreement with it to determine the exact scope of job cuts, Royal Mail counters that an earlier deal with the union in 2007 had already sanctioned all necessary future redundancies. The most recent figures show that the Royal Mail's letters and packages unit made an annual profit of £58m in 2008 from a turnover of £6.7bn. Royal Mail counters that this is a very small profit considering the size of the turnover, and staff cuts are required to prevent it returning to losses in the future

Answers:
a) The price elasticity of demand shows how demand responses to changes in price.
b) I’m not quite sure about changes in quantity demanded, because there is no information about demand for stamps in the chapter. I guess, that demand for stamps would not change a lot with rising in price for stamps, because there are not a lot of substitutes of using Royall Mail ( you have to buy stamps for using Royall Mail). So, I guess that the PED would be a number between 0 and 1, because % changes in price for first-class stamps is near 0,07 and % changes in price for second-class stamps is near 0,06. As I sad before changes in quantity demanded of first-class and second-class stamps would equal not a lot. That’s why PED would be between 0 and 1.
c) The number PED between 0 and 1 says us that demand for stamps is inelastic.

d) As I sad, there are not a lot of substitutes of using Royall Mail, that's why demand is inelastic. Also the amount, that person can spend on the stamps. The prices of stamps are not big so customers can buy it.

e) Because the demand for stamps is inelastic, Royall Mail wouldn't have a problems with consumption if the prices will go up. In my opinion, Royall Mail has problems with fundings because of another case (not connected with consumption).It can be a lot of spending or irrational spending.

f) 'Ceteris paribus' means all other things being equal or held constant.