Chapter 2 Web Based Question 1 and 2

Running Head : Chapter 2

Chapter 2 Web Based Questions

Name

College /University

Question 1 - DIAMONDS - INTERESTED IN BUYING ONE

eBay 's database , upon choosing the Loose Diamonds Gemstones category , discloses that there are 81 ,399 items for sale . The search can further be narrowed down to CZ , Diamond Simulants , Natural Diamonds Enhanced Natural Diamonds , Lab-Created Diamonds , and Gemstones (eBay 2008 ) Perhaps competition among sellers in this particular area of the market depends on the price , considering the cost of each items , the rarity of items , the composition of items

(natural , enhanced natural , or lab-created diamonds , etc , the style of the items , and the reliability and trustworthiness of the seller . Buyers are always searching for less expensive items that are at the same time rare , authentic , and stylish

Sellers need to close a deal in to gain profit from items so they do the most that they can in to ensure that their goods will be sold . Stiff competition in the industry dictates that sellers should make sure that their items are in good condition , all authentic and stylish but at the same time affordable to buyers . Reliability and trustworthiness comes in by asking for cost that suits the item so pricing items expensively may be acceptable if they are really rare and authentic . Perhaps pricing in the industry is extreme - lowering prices to obtain buyers while at the same time pricing items expensively to charge for the rarity and authenticity of items that buyers also look for

Buyers compete for items in eBay according to what they can get the most out of from their money . Competition is influenced by less expensive items that are of high quality , and also by rare items . Sellers base their prices on what buyers are looking for . If buyers purchase more items that are cheap , then prices of items will go down . If buyers are more often purchasing rare items , then the price of rare items will increase . The buying patterns of buyers often dictate how sellers will price their items

Question 2 - BARTER AND THE IRS

Exchange in goods or services that does not involve money as payments refer to the barter system . Some people resort to bartering because this becomes a means for them to not pay taxes for the goods or services they received . Avoiding paying taxes for goods and services received through bartering is possible if both parties do not reveal the transaction in their income or if the transaction is informal and noncommercial bartering of comparable goods or services . Barter exchanges , according to the IRS , are taxable . Involved parties should be able to a form to the IRS stating the contribution or the loss set off by the barter exchange (IRS , 2008

The value of a barter exchange is determined by the charge spent by an individual in delivering goods or services to a barter partner . This particular cost will be stated in the report that will be d in the IRS . Barter exchanges are participated...