Something that I found interesting was the effect of the internet on prices. "The ready availability of price information has not driven prices of identical items into alignment. Price dispersion still exists even though information is available for no cost at all. Some buyers are even still apt to purchase the more expensive item because of laziness.

By transaction costs, the McMillan means the extra costs that arise when buying or selling a good in a market.  This includes search costs and evaluation costs. Search costs are the time, money, and effort it takes to find a good. Evaluation costs are the "difficulty buyers have in assessing quality"(McMillan 44). For example, when wandering around a market place, a person might buy the first good that they come across, even if it is more expensive or lesser quality. A different person, on the other hand, might take a really long time finding the best value, but lose more in 'search costs'.

One of the results of imperfect information is overpricing. A lack of information flow can leave the buyer vulnerable to high prices for low quality. If the consumers don't know the different prices offered, than they are willing to buy for what they think is the normal price. If sellers assume this ignorance, than they can hike up the prices for maximum profit to the disadvantage of the customer. Furthermore, some merchants will quote high prices if they know the other merchants are doing the same. This leaves the customer vulnerable.