If the Internet Makes It Easier for Sellers to Find

question 7

Multiple Choice

If the Internet makes it easier for sellers to find buyers and makes it easier for buyers to learn about the products that are available for sale, we would expect that

• A) the volume of trade will decline.
• B) transaction costs will rise.
• C) the gains from trade will increase.
• D) buyers and sellers will be worse off.

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Definitions:

Unit Variable

A measurement that reflects how variable costs change per unit of production or activity level.

Unit Fixed

This specifies a cost or charge that remains constant per unit regardless of changes in the level of activity or volume of production.

Costs

Costs refer to the expenditures incurred by a business in the process of generating revenues.

Unit Contribution Margin

The difference between the selling price per unit and the variable cost per unit.