Answer the following questions true (T) or false (F)
1. Network externalities refer to the situation where the usefulness of a product increases with the number of consumers who use it.
2. A public franchise gives the exclusive right to produce a product for 20 years from the date the product is invented.
3. A virtuous cycle refers to the development of new products that follows when a monopoly earns economic profits.
1. TRUE
2. FALSE
3. FALSE
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Refer to Figure 15-12. Assume the firm maximizes its profits. What is the amount of consumer surplus?
A) $21 B) $124 C) $186 D) $332
An externality is an unintended ____ imposed on ____ as a result of the ____
a. c or d b. cost; sellers; negligence of others c. cost; third parties; economic activity of others d. benefit; third parties; economic activity of others e. benefit; sellers; beneficence of others