Asses the extent to which the internet has made markets more competitive

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The internet, created for access by the world’s population approximately twenty years ago, has evolved exponentially to improve market competition among firms and businesses. Its uniqueness has come from its ability for easy use and freedom of information, though with these fundamental principles, other characteristics have brought us closer to a sense of perfect competition than ever before. Indeed, the internet is rapidly becoming a necessity rather than the luxury it once was. In theory, the internet should mean that every market works perfectly. However, even the internet provides detrimental effects, often different to those of conventional means such as typical market failure.

The internet has been used to widen the customer base of particular businesses, creating greater profit margins than could ever have been imagined. This has been accentuated through the tactic of pricing internet-ordered goods and services cheaper than those on the high street. Consumers who may be disadvantaged due to disabilities, age, time constraints and so on are those who use the internet the most to buy. Previously, these people would have found it difficult to buy, but with the internet comes these frequent buyers. Even people who would have normally bought from high street shops would have the option of buying from the internet. Usually, a lot of people go out and buy things to socialise with friends. These people might seek the internet to buy things on their own if they cannot go out with friends.

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The cheap method of advertising and selling has allowed the internet to lower the costs of all businesses. As there are no overhead costs, little or no fixed costs and automated responses, businesses can maximise their investment with their increased profits and so compete to a much greater extent in markets. This is also much quicker than normal selling methods – consumers will return if they deem the customer service to be excellent, and the place to start with this is the internet, where information is widely accessible and buying takes up less time. Particular businesses can build up ...

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*** This essay lacks a proper structure. Points are made randomly. It would benefit from more analysis. There is little evidence of research to back up points e.g. what percentage of products are bought online? Points are made uncritically.