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Price Considerations and the Internet

How has the Internet affected price considerations? Analyze several different industries, such as airlines, sales, hotel reservations, and book sales.

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How has the Internet affected price considerations?

The advent of internet has offered new opportunities for value creation. It affects demand and cost structures resulting in difference in price considerations. Internet has impacted industries in several ways simultaneously to the extent that whole industries are being transformed which affects pricing power of individual firms. Access to better information at reduced cost has increased the competition in the market resulting in price levels. It is also expected that price convergence would happen in industries with consumers being able to get perfect information quickly, and as searching for, and evaluating alternatives has become easier.

Airlines: Internet is increasing the competition in the airline industry as a larger population is now searching for airline travel online. There have been studies which show that internet has ...

Solution Summary

This solution discusses how the Internet has affected price considerations.