A Good Is Subject to a Network Externality When

question 165

Multiple Choice

A good is subject to a network externality when:

• A)the value of the good to an individual is less when a large number of other people also use the good.
• B)the value of the good is determined only by marginal private benefits.
• C)an increase in the number of other people using the good increases its value to an individual.
• D)a good yields negative externalities.

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Definitions:

Quick Ratio

A liquidity metric that assesses a company's ability to meet its short-term obligations with its most liquid assets.

Short-Term Marketable Securities

Financial instruments that can easily be converted into cash within a short period, typically less than one year.

SEC

Securities and Exchange Commission, a U.S. federal agency that oversees the securities markets, protecting investors and maintaining fair, orderly, and efficient markets.

Annual Report

A comprehensive report on a company's activities, financial performance, and strategy, typically published yearly for shareholders.