Question

Price dispersion is measured as the distribution of prices for the same product/service across sellers at a given point in time.

Lower dispersion means that prices across sellers at a point in time are more similar to each other, i.e., there is less variability in pricing. Price dispersion is thought to be a good measure of information efficiency in a market. For example, when search costs for consumers are low (and consumers can easily compare competitive offers), price dispersion is expected to be lower (i.e., prices of identical/similar products should not vary much across retailers).

For this reason, common wisdom suggests that price dispersion should be lower on the Internet than for offline retailers. One implication of lower price dispersion is that competition among retailers would be more intense online than offline.

Do you agree with the “common wisdom” view that the Internet generates lower price dispersion (and hence, more intense retail competition)? Why – or why not?

Answer 1

ANSWER :  

I AGREE WITH THE COMMON WISDOM THAT INTERNET GENERATES LOWER PRICE DISPERSION

* because due to internet we get high income with low investment

* we get developed very fast

explanation :

internet has major role in online promoting by which our companies are grown very fast  

for example :

* flipcart , amazon , food delivery companies all of these are developed more with in a short time due to fast promotion of companies throught world with less cost of promotion by the internet

* if these companies without using internet iam sure to say that no way to develop faster and it may develop but takes more time with high cost of promotion  

internet is one of the best source to all marketing companies due to this not only private companies , govt is also having more benifit with less dispersion

for example : to spread any news fast we use news paper more likely in olden days but now we can spread through internet in less time without more money

* Due to low dispersion we have some advantages and disadvantages also

advantages :

* we can quickly find the customer

* we can quickly sell our products

* we can quickly devellop our company

* we can promote our products with low cost

disadvantages :

* missues of internet for fake news and cheating people

* normal promoter companies get lower ration because of more useage of online promoting

* it is a major disadvantage to firms in terms of competition

internet is one of the best platform for the start up companies to recruite employees easily and to tell about it self to world quickly and to develop faster with the lower dispersion cost

so finally iam saying that internet generate low dispersion i have to y it is dispersion with examples if u have doubts please comment if u lik the answer please like it