Internet comparison shopping sites like Shopping.com and Pricegrabber.com allow consumers to compare prices of substitute products much more easily than is possible without the Internet.These sites have
A) reduced the price elasticity demand for individual products.
B) increased the cross-price elasticity for substitute products.
C) increased the income effect on price elasticity of demand.
D) reduced the cross-price elasticity of demand for complementary goods.
E) decreased the price elasticity of demand for groups of similar products.

Question

Quizplus · Accepted Answer

Internet comparison shopping sites like Shopping.com and Pricegrabber.com have increased the cross-price elasticity for substitute products. This is because consumers can now easily compare the prices of different substitute products and make a more informed decision, leading to increased competition among substitute products. As a result, the demand for a particular product becomes more elastic, as consumers have more options and are more price-sensitive.

Internet Comparison Shopping Sites Like Shopping