Amazon's Use of the Internet as a Platform to Sell

question 56

Multiple Choice

Amazon's use of the Internet as a platform to sell books more efficiently than traditional bookstores illustrates a use of information services for

• A)low-cost leadership.
• B)marketing effectiveness.
• C)focusing on market niche.
• D)strengthening supplier intimacy.
• E)developing synergies.

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Definitions:

Income Effect

Change in consumption of a good resulting from an increase in purchasing power, with relative prices held constant.

Substitution Effect

Change in consumption of a good associated with a change in its price, with the level of utility held constant.

Perfectly Competitive

A market structure characterized by a large number of small sellers and buyers, homogeneous products, and freedom of entry and exit.

Profit Maximizing

A process or strategy used by businesses to determine the best output and pricing levels in order to achieve the highest profit.