Question

QUESTION 39 The role of platform firms is to reduce the amount of market competition among sellers. reduce the amount of information in the price system. lower transaction costs for buyers and sellers. reduce the level of voluntary exchanges in markets. QUESTION 40 The market clearing price of computer modems has just decreased. Which of the following could have caused this change? a decrease in supply with demand unchanged an increase in demand with supply unchanged a decrease in supply at the same time that demand increases an increase in supply at the same time that demand decreases QUESTION 41 In New York City, apartment rent can be adjusted only when a tenant leaves. This leads tenants to stay in apartments longer than they would otherwise. landlords to encourage tenants to stay in their apartments. businesses to build new rental units. people to change apartments often.

Answer 1

Q(39)

So when we are talking about platform firms which mainly creates value by providing the medium of exchange between the independent group, in these business model the platform provider doesn't have any inventory or product stock they just provide a medium of exchange between two or more person in a market and help independent seller to grow their business, thus in these platform their can be many seller, selling the same product and thus buyer has an advantage in selecting product from anyone who is offering it at lower cost thus it increases the overall competition in between the sellers, but the most important benefit of using these service is having an option to connect with large consumer base at lowest cost, i.e. transaction cost while interacting with the consumer is very low as compared to any other method.

Answer - Lower Transaction Cost for Buyer and Seller

Q(40)

So if the market-clearing price has just decreased that means now there is more supply in the market then it was earlier, as we know the market-clearing price depends on both the demand and supply thus if we have to decrease the clearance price either there should be increased in supply of product or there should be a decrease in demand, thus by looking at the above-given option I can say there is an increase in supply and at the same time that demand decreases.

Answer - an increase in supply at the same time that demand decreases.

Q(41)

So if the apartment rent can be adjusted only when the tenants leave, thus, in that case, a tenants will always try to stay longer and thus this is the way through which he can avail an apartment at lower cost because if he will vacate the apartment and move to somewhere else in different apartment he has to pay high rents

Answer - Tenants to Stay In Apartments Longer Then They Would Otherwise