Question

Amazon.com in managerial economics and business strategy.

Answer 1

managerial economics of Amazon :

1. Law of demand on amazon - law of demand states the inverse relationship between price and quantity demanded.

Amazon has more than 100 million subscribers around the world.

Increasing price of subscription from 499 to 999 has made consumer shift to other means.

2. Market equilibrium of amazon - amazon had a market equilibrium until They increased their price by $1 , now the quantity demanded and quantity supplied will move. Away from equilibrium.

3. Law of supply on Amazon - law of Supply states direct relationship between price and quantity supplied. So to elucidate, amazon must have increased their price but they also have added tons of new content which attracts more supply.

4. Elasticity of amazon - since there are many rivals of amazon so demand is highly elastic as a small increase in price can change huge demand .

Business strategy of Amazon :

Amazon's business strategy is based on one common goal : to seamlessly link the digital and brick and mortar shopping experience in order to be part of every single purchase to be made.

Amazon tries to offer an ever expanding and large selection of products to its customers so that they can achieve maximum satisfaction from shopoing eith Amazon.

Amazon stresses on the importance of customer satisfaction rather than its competitors.