Perfect competition is more likely to thrive in an environment in which buyers and sellers have more nearly complete and equal access to information. Historically, a factor hindering the development of European-wide competitive markets has been that a consumer in a country such as Portugal who was contemplating whether to buy substitute goods produced by a German, Italian, or Belgian firm had to compare prices in German marks, Italian lire, and Belgian francs. Making accurate comparisons of this sort required that every consumer stay abreast of the latest currency conversion rates, making it harder for consumers to shop around for the best buys. This contributed to great variability of prices from nation to nation within Europe. For example, the average price of a Big Mac varied by about 10 percent, Coca-Cola by nearly 30 percent, and bank account charges by well over 50 percent from one country to the next.

In 2002, Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain implemented a new monetary unit, the euro, which replaced the national currencies of these countries. Now that all prices in these countries are quoted in euros, the 300 million consumers residing in these 11 countries have an easier time spotting the best buys. This change should go a long way toward promoting more competitive markets in Europe.

Are regional price differences likely to have disappeared completely since 2002 due to the euro being the hand-to-hand currency in the euro-zone countries?