Price Elasticity of Demand: Doubling Stamp Prices

The postmaster general is assuming an absolute value of price elasticity of demand equal to 1. This means that they believe a 1% increase in the price of stamps will lead to a 1% decrease in the quantity of stamps demanded. This assumption is based on the idea that the revenue from stamp sales will double if the price doubles, indicating a perfectly elastic demand where the percentage change in quantity demanded equals the percentage change in price.