Research Assignment #2 BA 206 USPS Elasticity & Profitability

Words: 182
Pages: 1
Subject: Essays

RA #2 – Rough Draft is due on Monday in Week 4 by 11:59pm EST
RA #2 – Final Draft is due on Monday in Week 5 by 11:59pm EST
Late research assignments and emailed submissions will NOT be accepted for credit.
Each submission will be checked for plagiarism with SafeAssign in Blackboard.
In accordance with university policy, all forms of plagiarism will be reported to the School of Business as a violation of the academic dishonesty policy.
The United States Postal Service (USPS) is one of the few businesses that uses the following business model: as its costs increase… it simply raises price every year or so.
Not surprisingly, you will find that this strategy is not working in the favor of the USPS, and ultimately, not in the best interest of taxpayers. The USPS is currently experiencing severe financial problems.
o Students may work in groups of 2. However, each group member must contribute to each topic; don’t simply divide the assignment into pieces for each member to work on.
o Make sure to fully cite your sources within the text and include a references page.
o Do not use Wikipedia, Investopedia, or other “pedias” as sources.
o If a website gives confusing definitions and examples… try another source.
o DO NOT simply copy and paste information from the Internet. (This is plagiarism.)
o Answer each question in your own words (paraphrase).
1. Do you think the demand for first-class postage stamps in the U.S. was relatively price elastic or relatively inelastic in 1980? Do you think the current demand is relatively price elastic or relatively inelastic? Explain why there may have been a change in the relatively price elasticity in the last 30+ years. Hint: How has technology changed price elasticity?
2. Given your answer for (1), should the USPS increase, or decrease, the price of first-class stamps in order to increase its total revenue? Explain why this increase, or decrease, in the price will lead to an increase in total revenue.
3. Go online and research information regarding the USPS’s financial situation. What have been the USPS’s profits, or losses, in the last few years? What are the projected profits, or losses, in the next few years? Be specific and provide annual estimates.
4. As a manager, what recommendations would you make to improve the USPS’s current and projected financial situation? What are labors costs as a percentage of total costs? How would you address these issues given that the USPS’s workers are heavily unionized? Be specific. Note: Students are expected to write more than a few sentences for their answer.
5. What would it mean to privatize the USPS (use positive statements)? What is your personal opinion regarding the USPS and privatizing the USPS (use normative statements)?