Explain how the equilibrium level of output is determined in perfect competition Essays

Explain how the equilibrium level of output is determined in perfect competition Essays Explain how the equilibrium level of output is determined in perfect competition Paper Explain how the equilibrium level of output is determined in perfect competition Paper technology, products and consumer feedback. The introduction of price comparison websites has made the market hugely more competitive. It is now exceptionally simple to obtain the cheapest and highest prices of any good or service you want. This now means businesses have no choice but to compete and lower prices if they are to stay in business. The internet has also brought about consumer feedback which is very easy to find for pretty much any product. Before the internet it wasnt easy to find reviews and feedback on products, so there was a lack of information which also gave scope and benefitted businesses as if there was a disadvantage in there product and, or another product was better it was difficult to find out. The internet has made feedback extremely easy to find on most products which means any mistakes in products and services are highlighted and alternatives are recommended. This means the firms have to keep upto date and constantly maintain there product to keep themselves in business. The online market has significantly reduced or even removed transaction costs. For instance if you were buying a banana from a store; to purchase the banana, your costs will be not only the price of the banana itself, but also the energy and effort it requires to find out which of the various banana products you prefer, where to get them and at what price, the cost of traveling from your house to the store and back, the time waiting in line, and the effort of the paying itself; the costs above and beyond the cost of the banana are the transaction costs. An online business has no or significantly less transaction costs. This had made markets alot more competitive as online firms are able to provide there products cheaper than they are in shops. Developments have also introduced new kinds of retailers, like Amazon who have different business structures. However, the internet has also put great strain and eroded some markets. Businesses such as Antique shops have been put out of business due to the internet and internet auction sites such as eBay. People are able to sell there antiques from the comfort of there own and homes and perhaps even make more money selling online as opposed to taking it to there antiques dealers (this leads in with transaction costs). The most notable change in an industry is the music industry. The music industry has seen a huge slump with the development of the internet and the introduction of music downloads which has had a severe affect on shops and the artists themselves, as a lot of downloading is done illegally, which is free. So the internet has effectively allowed us obtain (although illegally) a product which a consumer would pay i 10-i 15, for free, very easily. However music listening has increased globally due to the internet.