Tobacco could not be grown in England. It could only be produced in the colonial South

Why does a network externality arise?

a. Each additional unit of a good sold reduces the value of the previously sold units. b. As more and more units of a good are produced, the average cost declines. c. Consumption of a good by one user does not affect the consumption of subsequent users. d. The firms enjoy economies of scale in the long run. e. Each additional unit of a good sold increases the value of the previously sold units.

When the average total cost curves for firms are unaffected by the entry of other firms,

a. it is an increasing-cost industry b. it is a decreasing-cost industry c. the market's equilibrium price will eventually be restored after the market demand increases d. firms will charge a higher price when demand rises e. the long-run supply curve is positively sloped