Final answer:
E-commerce involves various types of online transactions, including B2C, B2B, C2C, and C2B. Technological advancements and globalization have expanded market competition and reshaped economic activities, contributing to the evolution of a 'modified free enterprise economy'.
Step-by-step explanation:
E-commerce, or electronic commerce, refers to the buying and selling of goods and services through the internet, and is a key component of the modern economy. It encompasses different types of transactions, primarily including business-to-consumer (B2C), business-to-business (B2B), consumer-to-consumer (C2C), and consumer-to-business (C2B). In a B2C model, businesses sell directly to the end consumer, while in a B2B model, transactions occur between businesses, such as wholesalers and retailers or manufacturers and suppliers. C2C involves transactions between consumers, often facilitated by third-party platforms like eBay or Etsy, and C2B allows individuals to sell products or services to businesses.
Two significant shifts, technology and globalization, have redefined markets, largely due to advancements in communications technologies such as the internet. These developments have dramatically increased competition by enabling consumers to purchase items from anywhere in the world and allowing suppliers and buyers, especially in the B2B market, to easily connect. These changes have led to what's sometimes referred to as a 'modified free enterprise economy' in the U.S., where market-oriented activities are heavily intertwined with international trade, leading to both opportunities and disruptive market changes.