In a two-sided market, the platform may offer different prices to different group of end users due to
A) the budget constraints of end users.
B) substitution effects between the end users and the platform.
C) different network effects between groups of end users.
D) a lack of product differentiation in the products sold.

Question

Quizplus · Accepted Answer

Different groups of end users can have different network effects, meaning that they may value the platform differently. For example, if a platform targets both buyers and sellers, buyers may be more likely to use the platform if there are more sellers on it, while sellers may be more likely to use the platform if there are more buyers on it. Therefore, the platform may need to offer different prices to each group to maximize its overall revenue.

In a Two-Sided Market, the Platform May Offer Different Prices