2.10 The U.S. Postal Service (USPS) has a constitutionally guaranteed monopoly on first-class mail.

In 2012, it charged 44¢ for a stamp, which was not the profit-maximizing price—the USPS’s goal, allegedly, is to break even rather than to turn a profit. Following the postal services in Australia, Britain, Canada, Switzerland, and Ireland, the USPS allowed Stamps.com to sell a sheet of twenty 44¢

stamps with a photo of your dog, your mommy, or whatever image you want for $18.99 (that’s 94.95¢

per stamp, or a 216% markup). Stamps.com keeps the extra beyond the 44¢ it pays the USPS. What is the firm’s Lerner Index? If Stamps.com is a profitmaximizing monopoly, what elasticity of demand does it face for a customized stamp? (Hint: See Solved Problem 11.3.)