Network Externalities

question 66

Multiple Choice

Network externalities:

• A) increase the likelihood that an industry will become a winner-take-all industry.
• B) increase competition among existing firms in a market.
• C) weaken forces that lead to monopoly in an industry.
• D) promote the entry of new firms in a market.

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Definitions:

Production Machinery

Equipment and machines used in the manufacturing process to produce goods and products.

Capital Equipment

Long-term assets such as machinery, vehicles, or large tools that a business uses in its operations to produce goods or services.

Leverage Ratio

A financial ratio indicating the level of debt used by a company to finance its assets, relative to its equity.

Tax Burden

The total amount of income, property, and sales tax that an individual or corporation must pay to various government agencies.