The Net: A Market Too Perfect for Profits - Article Example

The customer gets an opportunity to compare the prices and the quality of competitive products. This resultantly nullifies market monopoly.  In other terms, this increases competition. Higher competition reduces the margin of profit. The author has quoted the great mid-century economist, Joseph Schumpeter in support of this view. He opined that imperfect competition is necessary for efficient capitalism.  In the context of e-commerce, the author has related this to confirm that the open and transparent sort of economy and market that e-commerce offers will limit the profit margin of the companies in the field.

            In totality, the article explains the economic theories underlying market competition and monopoly. The e-commerce sector has been explained as a business that on one side offers transparency but on the other side limits the profitability of the products offered. In generic economic terms, the whole scenario of e-commerce as explained in the article can be summed up as ‘competition is inversely proportional to profit margins’.