There are many companies especially in IT sector which make huge profits. For example, Google and Microsoft have already made billions of dollars as profit. Does that mean they overpriced their products and made these huge profits. To make it clear, are we not paying more for Windows software or advsertising in Google? I would like to know experts opinion in this regard.
Is there a limit on amount of profit one campany can make?
There are many companies especially in IT sector which make huge profits. For example, Google and Microsoft have already made billions of dollars as profit. Does that mean they overpriced their products and made these huge profits. To make it clear, are we not paying more for Windows software or advsertising in Google? I would like to know experts opinion in this regard.
The objective of the company is to maximise its share price and thus maximise shareholder wealth. Therefore the company should aim to make the highest profits possible.
However the profit MUST be made in an ethical and legitimate manner. I think this is more of a question about ethics than anything else.
First answer. No. If they can make infinite money, then they will try and under capitalism this is what it is all about. If your product is successful, you reap the benefits. Have to remember that success in capitalism means you have found the “right solution” to product, competitors, user demand.
As far as morality, is it better to only profit one dollar if people will pay one hundred? I bet some people think one dollar is acceptable and some people think one hundred dollars. There is no real “standard” as to what profit is “moral”. That is why most people support that profits should be what the market will bear.
Which is your question? No there is not some arbitrary limit to the amount of profit a company can make, but the number is limited by the extent of their business. And, profits do not mean customers are overpaying, although customers could be paying less if there was more and better competition.