How does internet technology affect competition among businesses?

The correct answer highlights how internet technology enhances the availability of information among rivals, which significantly influences competition in various ways. With the internet, businesses can access vast amounts of data about market trends, customer preferences, and competitor strategies. This accessibility allows companies to make informed decisions, adjust marketing strategies quickly, and respond to changes in consumer behavior more effectively.

When businesses are equipped with real-time information about competitors, they can better analyze the competitive landscape, giving them an edge in terms of innovation and customer engagement. This can lead to a more dynamic market environment where companies are continuously evolving their offerings to maintain or enhance their competitive position.

While other aspects like minimizing the cost of entry (which can attract new competitors) and enabling price competition (which can lead to price wars) also play a role in shaping the competitive landscape, the fundamental shift brought about by increased access to information allows for a deeper understanding of the market, fostering strategic decisions that can either make or break a company in a competitive setting.