Answer to Question #54732 in Microeconomics for Kenneth

Question

The advent of mobile shopping apps has led to an enormous growth in online shopping, particularly for electronic goods. Explain what effect is the introduction of shopping apps having on:

(a) Competition in the retail market for electronics
(b) The profitability of the traditional brick-and-mortar retailers of electronics
(c) The consumer surplus of purchasers of electronics

Answer 1

Effect of the introduction of shopping apps will be:
(a) Competition in the retail market for electronics will increase significantly.
(b) The profitability of the traditional brick-and-mortar retailers of electronics will decrease.
(c) The consumer surplus of purchasers of electronics will increase, as the competition rises, so the prices will fall.