What are excess profits ?

What are excess profits? How do we define them ? Companies that produce goods and services that we will demand regardless of price (oil and pharmaceuticals) are believed to be benefitting from the ineslaticity of our demand and hence charging us excessive profits. However, what would you say that periodicals publishers and book publishers have higher profit margins than oil producers and refiners?

I took the time to use Yahoo! Finance to see how large (or small) are profit margins by industry. It is an interesting since oil and gas refining, generic drug manufacturing, oil and gas pipelines and major oil and gas integrated firms have net profit margins of 2.9 %, 4,7 %, 5.3 % and 6.8 %. This is compared with confectioners at 7.3 %, toys and games at 9.6 %, soft drinks at 14.2 % and periodical publishing at over 52%.

See the table below

 

 

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