Question

Sometimes "corporations" and "profits" can have a negative association. Specifically answer this prompt: From the three theories of profit in the module, do you find any of them 'good' for society or 'bad' for society? Are there any other ways companies or entities make profits not included in this list that you can think about? Pick one of the three theories of profit and give an example (either personal or not) of a company or entity that made profit in that specific way.

Theories of profit: 1)Uncertainty 2)Arbitrage 3)Innovation

Pick a theory of profit and describe if it is 'good' or 'bad' for society and why. Give an example of a company (or personal experience) where profit from that source was achieved. Include a detailed and accurate application of one or more of the concepts: three theories on profit, the incentives of profit in society.

Answer 1

Innovation theories of profit always has good positive externality to society which helps complete transformation and evolutionary changes which change human mankind. For example firms like SK Telecom is pioneer in rollout of commercial 5G in Korea which has helped many firms to deploy IoT based technologies and use for driverless cars, plant maintenance, robotic surgery, etc. The incentive to innovation is profit in long run which comes at cost kf high expenditure on capital.

Here company gets first mover advantages by charging exorbitant fees for niche services and makes considerable profits consequently just through innovation.

However many companies make profit due to unethical means through misproportionate disclosure jn balance sheets or extrapolation of figures or violation of laws.