Asked by
Rylie Rygiel
on Oct 26, 2024Verified
Network externalities are often:
A) separate from positive feedback.
B) a reason for natural monopolies.
C) less likely to occur in the communications or technology industries than they are in other industries.
D) not likely to move toward market domination.
Network Externalities
The effect on a user of a product or service that results from an increase in the number of other users of the same or compatible products or services.
Natural Monopolies
Market conditions where a single firm can supply a good or service more efficiently than any competitor due to economies of scale, hence dominating the market.
Positive Feedback
Put simply, success breeds success, failure breeds failure; the effect is seen with goods that are subject to network externalities.
- Describe network externalities and their impact on market outcomes.
Verified Answer
LG
Learning Objectives
- Describe network externalities and their impact on market outcomes.