Saturday, September 22, 2018

Amazon in the eye of Economics

Monopoly:-

Amazon operates in many different business sectors. Primarily, it is a goods retailer 70%. Its amazon web services content hosting and cloud computing business contributed 9% and Amazon's media businesses provided roughly 18% of the company's annual revenue.


Economics of Scope:-

Amazon provides many services under it as retail goods, Amazon prime, Amazon web services, Amazon go, etc., which reduces average cost of production.


Cost benefit analysis:-

Amazon's goal is to increase its profitability through the application of new technology resulting in a better delivery system for a subset of its customers. So, Amazon is thinking to introduce Prime Air Drone delivery and will see whether it is more cost effective or not


Price mechanism:-

When there is a season sale, or when there is requirement of pushing the goods the supply becomes high and demand gets low along with the price.



Elasticity:-

Elasticity in Amazon is used to measure the change in the quantity demanded for a good in relation to price movements of that good.

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