The bid–ask spread is the difference between the price at which liquidity suppliers are willing to sell (ask) and the price at which they are willing to buy (bid). In the theoretical models discussed so far, the existence of the spread is due to the adverse selection costs arising with asymmetric information and to inventory costs. This article concerns the basic empirical models of market microstructure, which take another component of the bid–ask spread into account, namely order processing costs. Order processing costs are the costs associated with the handling of a transaction and are typically modelled as fixed costs per share.

We emphasize that each trade has a buyer and a seller, so the costs for one party are the trading profits for another party. It is natural to look at costs from the perspective of an impatient trader, who consumes liquidity by placing market orders and pays the bid–ask spread. Adverse selection and inventory costs depend on traders’ behaviour, type
and preferences, and on the characteristics of the trading process. By nature, inventory costs exist only in quote-driven markets, where intermediaries have the institutional obligation to supply liquidity continuously; adverse selection and order-processing costs, on the other hand, may exist in any financial market.

Here, you will find a cornucopia of places where products in the category you are searching are being sold. The same stores that you have just visited will likely have links on the Internet. So, why bother to go out to the stores in the first place? Because you want to actually see the similar products that are on store shelves. And, you want to gather the information that you can get from the product labels. If you should find a product that is offered for the same purpose as your idea, you can inspect it closely to see if your idea is an improvement on that product. Also, retailers do not usually have every product that is in their stores on their websites, so it is important to make sure that you do not overlook something by failing to make that trip to the store.

Individuals often make and sell products on the Internet that are offered nowhere else. If you neglect to do a good Internet search, you will miss this prior art. What is prior art?

If an active patent covers a product, you cannot legally make and sell it.

If that patent has expired, that product is said to be in the public domain and is now available to anyone to make and sell.

A product that has never been patented but has been offered for sale to the public is also said to be in the public domain and can never be patented.

All of the above examples are prior art; products that have already been presented to the public and cannot now be patent protected. One of the first things the examiners at the patent office will do when they begin with your application is to initiate a thorough search for prior art. If you failed to find these products but they were found in subsequent searches related to your patenting efforts, your patent would be rejected and you would have spent your money and your time in vain. It pays to be meticulous in your Internet  searching.