The prices of first and second class stamps are to rise by 1p from 27 March, Royal Mail has announced.
It will take the price of a first class stamp to 65p, and second class to 56p.
Royal Mail said the price rises were necessary to maintain the universal service - the principle that it delivers letters across the whole of the UK for the same price.
A stamp for large first class letter will rise by 2p to 98p. A large second class letter will go up by 1p to 76p.
The increases are in line with the rise in the Consumer Prices Index (CPI), which rose by 1.8% in the year to January.
Questions
1. What factors affect PED for stamps?
2. Why might this price rise encourage advance purchases?
3. How will this affect consumer surplus?
