Question

How has the Internet changed economic systems?

Answer 1

Answer:

C. by reducing the need for personal computers

Explanation:

The Internet, like energy or transport, has become an essential part of the infrastructure of countries, and a factor of production in almost any activity of any modern economy. The Information Technology sector and Communication (TICs) is quite small in the economy. Its share in GDP is around 6% in OECD member countries and considerably lower in developing countries, highlights the World Bank study, Digital Dividends Overview.

The study highlights that the Internet allows the participation of many small companies in world trade, also supports the existing capital to be more productive, which increases efficiency and, by encouraging competition, encourages innovation.

The Internet allows products to be exported to more markets, often by younger companies. With an increase of 10% of internet use in the exporting country, the number of products traded between two countries increases by 0.4%. A similar increase in Internet use in two countries increases by 0.6% the average value per product of bilateral trade between the two.

When fully automated Internet-based services reduce marginal transaction costs to near zero, the consequences for market structure are somewhat ambiguous. Low marginal costs imply large economies of scale, which favor natural monopolies. In the non-Internet world, these sectors -for example, the production of electricity- usually require some type of regulation to protect the interests of consumers. However, the characteristics of internet-based services could also encourage competition. For example, price comparison websites should reduce prices for consumers, but available data show the persistence of price dispersion on the Internet, in part because companies are becoming more astute in price discrimination , by offering different prices to different consumers based on their search history, geographic location or other information collected about buyers.

Answer 2

Answer:

c

Explanation: