The Internet has made transactions between businesses (B2B trading) fast and easy. Any business in any location can access specialized knowledge, labor, and materials. It is likely that these virtual economic communities will result in
A) consolidation of industries into a small number of powerful firms.
B) internal economies of scale.
C) suppression of innovations and collusive behavior, driving up prices.
D) government intervention and regulation.
E) external economies of scale.

Question

Quizplus · Accepted Answer

Virtual economic communities allow for businesses to access specialized knowledge, labor, and materials from any location. This leads to external economies of scale, where businesses can benefit from the efficiencies and cost savings of working with other businesses in the community. It is less likely to result in the consolidation of industries into a small number of powerful firms or suppression of innovations, as the accessibility of resources and competition within the community can promote growth and innovation. While there is potential for collusive behavior and government intervention may be necessary to prevent it, it is not the most likely outcome.

The Internet Has Made Transactions Between Businesses (B2B Trading) Fast