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The costs to the buyers on shopping by using online platforms is zero while the costs to the sellers in participating in these online markets are almost zero (and negligible relative to the large sales volume). The costs of exiting these market platforms for sellers is zero. Assume that the costs of shipping and transactions costs are zero and let us consider the product hand sanitizers in an online global market.
PART C: Assume now that the costs of shipping are so large that Australian consumers can buy hand sanitizers from only one designated seller in Australia through both ebay and Amazon and there is no possibility of buying hand sanitizers in person in retail stores or any other online platforms. Explain with the help of a diagram whether this seller would be making a profit or a loss in the short run and in the long-run
Question: Refer to part C) above; certainly Australian consumers will not be happy buying hand sanitizer from only a designated seller. Briefly explain the possible welfare implication of this situation. Now assume that the Australian government decides to intervene in this market. What possible measures can the government use to improve the welfare of Australian buyers?
(if you could just answer the question part would be fantastic)
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