In regards to the company Amazon: 1. What can you say about economic profits for

Question

In regards to the company Amazon:
1. What can you say about economic profits for this firm in the short as well as the long run?
2. Does data support economic theory?
3. How can this profit stream change over time?
PLEASE ANSWER IN PARAGRAPHS AND INCLUDE YOUR SOURCES. In regards to the company Amazon:
1. What can you say about economic profits for this firm in the short as well as the long run?
2. Does data support economic theory?
3. How can this profit stream change over time?
PLEASE ANSWER IN PARAGRAPHS AND INCLUDE YOUR SOURCES.
1. What can you say about economic profits for this firm in the short as well as the long run?
2. Does data support economic theory?
3. How can this profit stream change over time?
PLEASE ANSWER IN PARAGRAPHS AND INCLUDE YOUR SOURCES.

Explanation / Answer

1. In short run firm will earn profits as number of firms are less in industry . In long run more firms will enter the market and thus this will drive the price down and increased supply . Thus in long run profits will be exhausted and firm will earn normal profits .

2. This is supported by theory of perfectly competitive firms.

3. Profits will decrease over time as more firms will enter making the industry more competitive.

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