Jeff Bezos explains how Amazon makes money while keeping prices low

Amazon rolled out a new family of Kindle devices today at a press conference in Santa Monica, Calif., including a high-end tablet for only $499.

So, how does Amazon do it? How does it keep prices low, while still offering some of the latest hardware? Not to mention, how does it give away an ever-expanding catalog of movies and books for $79 a year in addition to free two-day shipping?

In an interview with AllThingsD, Amazon’s founder and CEO Jeff Bezos provided some insight into the company’s economics.