A Situation in Which Something Has Increasing Value as More

question 23

Multiple Choice

A situation in which something has increasing value as more people use it is referred to as __________?

• A) a patent.
• B) network externalities.
• C) hold-ups.
• D) first mover.
• E) licensing.

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Definitions:

Weighted-Average Method

An inventory valuation technique that calculates the cost of inventory by taking the average cost of all similar items present in the inventory.

First-In, First-Out Method

An inventory valuation method whereby the oldest inventory items are recorded as sold first, thus the cost of items purchased first is charged against revenue earlier.

Equivalent Units

A concept used in cost accounting to convert units of production into a common measure.

First-In, First-Out Method

An inventory valuation method where the oldest inventory items are recorded as sold first, leaving the newest inventory in stock.