Setting the Best Postage Rates for Catalogs and Direct Mail

What's wrong with the proposed postage increase? The demand for First Class mail won’t change much when the price of a stamp goes up two cents. When the price goes up, First Class mail volume doesn’t fall off very much. So the USPS achieves an increase in revenue and profits. But direct mail volume is directly tied to costs; a price increase raises break-even points and volume inevitably falls. So the increase in price results in a decrease in volume.