How does a network externality serve as a barrier to entry? Is this barrier surmountable? Explain
What will be an ideal response?
A network externality exists where the usefulness of the product increases with the number of people who use it. It can serve as an entry barrier because the popularity of the product attracts more and more consumers, thereby increasing the supplier's dominance in the market. However, this barrier is not insurmountable. If a rival enters the market with a superior product, then it is possible that customers will switch to the superior product.
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Entrepreneurs often undertake the innovations that are necessary to bring inventions to the marketplace. Accordingly, what empirical pattern should be expected in an international comparison?
A) Countries with higher rates of entrepreneurship have higher rates of poverty. B) Countries with higher rates of entrepreneurship have lower rates of immigration. C) Countries with higher rates of entrepreneurship have lower rates of economic growth. D) Countries that protect the property rights of entrepreneurs will have higher rates of economic growth.
A special kind of imperfectly competitive market that has only two firms is called
a. a two-tier competitive structure. b. an incidental monopoly. c. a doublet. d. a duopoly.