Case study 2.10 How making a market
can make you money
Summary
This case study uses the example of person-to-person loan markets to illustrate the idea
that voluntary trade will always make a surplus for buyers and sellers better off, and that
a market intermediary who brings together buyers and sellers, may be able to make
money by taking some part of the surplus in return for having brought them together.
Suggested answers
1 Can you think of other examples of intermediaries who make money by bringing
together buyers and sellers?
Some examples are: (i) Mortgage brokers who bring together home buyers who require
finance to purchase their home with financial institutions that can make home loans; (ii)
On-line sites such as E-Bay and amazon.com which bring together sellers of used items
(such as books) with potential buyers for those items; and (iii) Archicentre which
matches individuals wanting to build or renovate homes with architects who can
undertake the design and management of those projects.
2 How has the internet assisted with making markets?
