Final answer:
Apple's e-book business model affected Amazon by increasing the bargaining power of suppliers, leading to standardized e-book pricing and disrupting Amazon's capacity to set lower prices.
Step-by-step explanation:
Apple's entry into the e-book business affected Amazon by impacting the bargaining power of suppliers. Option B is correct: The bargaining power of suppliers, the content providers, increased from Amazon's perspective. Due to Apple's agency model, where publishers set the prices of e-books, Amazon, which had previously used a wholesale model to price e-books lower than physical books, faced a scenario where e-book prices were standardized across platforms, thus reducing Amazon's ability to aggressively price e-books lower than competitors. This change in the business model caused significant disruption in the industry's pricing strategies.
Apple's e-book business model had a significant impact on Amazon. The correct answer is A. Amazon had to further reduce the prices of its e-books.
When Apple entered the e-book market with its agency model, where publishers set the prices of e-books and Apple took a commission, it led to higher prices for e-books. As a result, Amazon had to lower its prices to remain competitive. This affected Amazon's profitability but also increased its market share in the e-book industry.
By reducing the prices of its e-books, Amazon attracted more customers and solidified its position as a leading e-book retailer.