Which of the following best describes how technological factors have allowed TaskRabbit to impact the market for household services?

• A. Connect service providers and consumers more efficiently through an online platform
• B. Reduce competition by limiting the number of available service providers
• C. Eliminate the need for any form of payment between users
• D. Increase the cost of household services by introducing new fees

Answer: (A)

Verified step by step guidance

1. Understand the role of technology in market dynamics, particularly how it affects the interaction between consumers and service providers.
2. Recognize that technological platforms like TaskRabbit primarily serve as intermediaries that facilitate connections rather than directly producing or consuming services.
3. Analyze how an online platform can reduce transaction costs, such as search and information costs, making it easier and faster for consumers to find service providers.
4. Consider the impact on competition: does the platform limit the number of providers, or does it increase market access and competition by broadening the pool of available providers?
5. Evaluate the effect on pricing and payment: does the platform eliminate payments, introduce new fees, or simply provide a more efficient marketplace that could influence prices indirectly?