Two-sided markets
A)have twice as many users as one-sided markets.
B)have two or more user groups that provide each other with network externalities.
C)require the internet to function properly.
D)are more efficient than other market types.

Question

Quizplus · Accepted Answer

Two-sided markets have two or more user groups that provide each other with network externalities, meaning that the value of using the platform increases for one group as more users from the other group join. This creates a virtuous cycle of growth and can lead to strong network effects. Option A is incorrect as the number of users in a market is not directly related to whether it is one or two-sided. Option C is incorrect, as while the internet may facilitate two-sided markets, they are not required for them to exist. Option D is also incorrect, as there is no evidence that two-sided markets are inherently more efficient than other market types.

Two-Sided Markets