EBay is a secondary market for goods in the same way that theNYSE is a...

EBay is a secondary market for goods in the same way that the NYSE is a secondary market for stocks. Explain how EBay users helps keep prices efficient for any generic good (if you need a tangible example, how about a Make America Great Again hat?). This mechanism should be analogous to how traders keep prices efficient for stocks. Be detailed in your explanation to walk through the exact mechanism.

Solutions

Expert Solution

eBay are helping in keeping the prices efficient because they are helping consumers continuously transact with each other and these continuous transaction of them with each other is continuously discovering the prices of these used goods and it is also trying to provide with the incentives to various users about the prices of these commodities after a certain period so that they would be properly analysing the efficiency and the depreciation pricing in the overall pricing of the original product.

it is just like the traders which are always keeping the prices efficient for the stocks because traders are continuously exchanging quotes with each other and they are trying to find out the value of the share continuously so the true worth of the company is analysed and continuous training of these commodities on eBay is related to finding out the continuous price of these companies and this is also reflecting the consequences of large market participants so this is trying to provide with the elimination of the prize discrepancy and it is also providing a transparent mechanism of providing of prices of various commodities so it is enhancing price efficiency in the generic markets.

For example, if you are trying to sell an used iphone 6, it will determine the value of these phones after they have been used for six years and it can be relatively related with someone who is trying to buy a new iPhone 6.

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

Secondary market is the supporting factor for primary market. Discuss the functions of secondary market which...

Secondary market is the supporting factor for primary market. Discuss the functions of secondary market which helps in successful operation of primary market. Support your answer with real time examples in Oman . (500 words)

2. In the oligopoly market, only two companies A and B produce goods of the same...

2. In the oligopoly market, only two companies A and B produce goods of the same quality. Each company is involved in producing goods. The marginal cost and average cost are the same at 30. When the market demand function is Q=900-10P, answer the following questions - Draw the balance with Bertrand, and describe the process in which Bertrand's balance was drawn. -Draw the profits of each of the two companies in Bertrand's balance.

"Scarcity implies that some way of rationing goods must be found." Explain how the market price...

"Scarcity implies that some way of rationing goods must be found." Explain how the market price system promotes greater economic activity than alternative systems of deciding who gets the benefits of production. (eg., first come-first served, equal shares or random lottery.) (6 points)

Explain the difference between a primary market for a security and a secondary market for that...

Explain the difference between a primary market for a security and a secondary market for that security AND what advantages does a Secondary market bring? ---------------------------------------------------------------------------------------------------------------------------------------------------------------- How does an increase in interest rates affect a security's duration?

Describe the two methods of organizing a secondary market.

Is obtaining a student loan a normally primary market and a secondary market transaction?

Is obtaining a student loan a normally primary market and a secondary market transaction? How could a student loan evolve into a secondary market investment?

Two companies (Craigslist, Ebay, etc) who are vying for a piece of the online rental market....

Two companies (Craigslist, Ebay, etc) who are vying for a piece of the online rental market. For each of those companies, what are the prospects, and why?

Why is eBay not exactly perfect competition? In other words, for what reasons is eBay...

Why is eBay *not * exactly perfect competition? In other words, for what reasons is eBay not exactly "perfect competition"? Thank you!

Would you be purchasing financial securities in the primary market or in the secondary market? Explain...

Would you be purchasing financial securities in the primary market or in the secondary market? Explain your choice. (Avoid plagiarism 300 words.)

1. Suppose a secondary good is supplied in competitive market. A monopolist supplies the market for...

1. Suppose a secondary good is supplied in competitive market. A monopolist supplies the market for the primary good. The demand for the primary good is unitary (either 0 or 1), the marginal cost of producing the primary good is zero. The market for the secondary good has two types of consumers: those in proportion λ have inverse demand schedule ?? = 5 − 1 2??, while the remaining 1 − λ have inverse demand ?? = 10 − ??....

Subjects