The Internet has made it possible to compare lots of prices without incurring a lot of cost.This
A) has given firms added market power to price discriminate.
B) has significantly reduced search cost and made markets more competitive.
C) has enabled firms to charge higher prices to consumers with computers.
D) has only affected technology markets.

Question

Quizplus · Accepted Answer

The ability to compare prices easily and quickly online has reduced the time and cost of searching for products, allowing consumers to find the best deals. This increased transparency and competition in markets, making it more difficult for firms to charge higher prices. Therefore, B is the correct answer. A is incorrect because while online price comparison can increase firms' market power, it can also reduce it by increasing competition. C is incorrect because online access does not affect pricing strategies; instead, it may provide discounts for online purchases. D is incorrect because the effect of online price comparison is not limited to technology markets but applies to all industries.

The Internet Has Made It Possible to Compare Lots of Prices