The role of platform firms is to
A. reduce the amount of information in the price system.
B. reduce the amount of market competition among sellers.
C. lower transaction costs for buyers and sellers.
D. reduce the level of voluntary exchanges in markets.
Answer: C
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Refer to Cournot Problem. Total industry output will be
Consider a Cournot oligopoly with two identical firms. These firms each have constant marginal costs of $10. The market for these firms’ product has demand Q = 100 - P. a. 30 units. b. 45 units. c. 60 units. d. 90 units.
The above figure shows the supply curves in four different markets. If each of the markets has an identical downward sloping demand curve and the same tax is levied on suppliers, which market would produce the smallest amount of deadweight loss?
A) A B) B C) C D) D E) A and D
Which of the following four firms would most likely NOT be part of a perfectly competitive market?
A) Mark sells his tomatoes at the local farmers market. B) The WaveHouse is the only place in San Diego where you can ride an indoor 10 foot wave. C) Village Pizza sells pizza in a college town. D) Space Age Fuel is a gas station in Bend, Oregon.
Assume that the currency—deposit ratio is 0.5. The Federal Reserve carries out open-market operations, purchasing $1 million worth of bonds from banks. This action increased the money supply by $2 million. What is the reserve—deposit ratio?
A) 0.25 B) 0.35 C) 0.40 D) 0.50