Management Information System (MIS) Practice Exam

Which of the following statements is true about electronic commerce?

1. Business-to-business is by far the largest form of electronic commerce in terms of revenues.

2. It is limited to transactions between businesses and consumers.

3. Electronic commerce between businesses and their employees is not possible.

4. All forms of electronic commerce involve business firms.

The correct answer is: Business-to-business is by far the largest form of electronic commerce in terms of revenues.

The statement that business-to-business is by far the largest form of electronic commerce in terms of revenues is accurate and reflects the structure of the e-commerce market. Business-to-business (B2B) electronic commerce involves transactions between businesses, such as manufacturers and wholesalers or wholesalers and retailers. This segment tends to generate significantly higher revenues compared to other forms of electronic commerce, like business-to-consumer (B2C), due to the larger volume of transactions and the typically higher dollar amounts involved in B2B deals. B2B transactions often involve bulk purchases, long-term contracts, and economies of scale that B2C transactions cannot match. As a result, many large companies engage extensively in B2B e-commerce, which contributes to making it the largest segment in terms of revenue generation. The other statements lack accuracy in various aspects. For instance, claiming that electronic commerce is limited to transactions between businesses and consumers disregards the B2B and consumer-to-consumer (C2C) categories that are also part of the overall e-commerce landscape. The notion that electronic commerce between businesses and their employees is not possible ignores the significance of internal e-commerce systems, such as procurement platforms and employee-focused online resources. Finally, stating that all forms of electronic commerce