Business Economics, Amazon.

Amazon is launching a new courier service in the UK, “Shipping with Amazon”, where it will collect parcels from online retailers and deliver them next day to the customer. With this new initiative, Amazon effectively become a shipping and logistics provider for retailers, competing directly with third-party shipping companies. Using relevant economic concepts and theories, provide the rationale behind this decision. Discuss how you anticipate this move may affect the overall market of postal service in the UK, both in the short-run and long-run.

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