Zero Marginal Cost and Virtual Rent
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In microeconomics, the belief is that as long as the price is equal to the marginal cost, resource allocation is efficient. However, the marginal costs of the trade platforms on the Internet are almost zero. How could they cover their costs? This chapter presents that these trade platforms can gather people densely, bring about market network externalities, and generate virtual rents. These trade platforms can have virtual rents under the names of usage fees, trade commissions, and competing ranks, and can receive income under the condition of a zero price to enter and cover their costs and earn their profits.
KeywordsInternet Zero marginal cost Virtual rent
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