What does it mean to say that a good generates network externalities?
What will be an ideal response?
For a good with network externalities, the value of the good to any particular consumer increases as more customers begin to use it. For example, the value to you of being on Facebook is higher the more people who use Facebook. Therefore by acquiring a large customer base, a particular firm may acquire market power.
Economics
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Recall the Application. If the decrease in price of illegal drugs is primarily due to a change in supply, the equilibrium quantity of drugs
A) will increase. B) will decrease. C) will not change. D) may or may not change.
Economics
For simple loans, the simple interest rate is ________ the yield to maturity
A) greater than B) less than C) equal to D) not comparable to
Economics