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The Internet has changed a great many ways about not only how we inter-react socially with each other mainly through Live Chat Facilities etc. but also how we can economically interact with each other in the number and range of goods and options available to us and these have increased exponentially .

In theory this is explained by an analysis of three basic so called laws that makes the Internet possible. First up there is Moore’s Law as stated by the one of the founders of Intel who postulates that the technology and the processing power of computers effectively doubles every two years. This is followed very swiftly by Metcalfe’s Law who states that the use of technology and the Internet means that it very quickly becomes possible to see increased costs of production becoming marginal more quickly via the Internet than through conventional businesses. An example of this is the sale of E-books. It might cost $5,000 to produce and publish one e-book and therefore to breakeven with one sale you would have to charge $5,000. However it might only cost $5,001 to produce 100 E-books therefore you would only have to charge $50 or so to breakeven.

The final theory that makes up how the Internet works is Ronald Coase’s Theory of the Firm whereby he analyzes transactional cost theory and states that it is much easier when you get to a certain cost base to subcontract certain services because it is cheaper for specialist suppliers to provide the service than it would for the purchaser to provide the service internally. An example of this would be the   [Article continues below...]