Network Externalities

question 54

Multiple Choice

Network externalities:

• A)can explain why more efficient technologies displace less efficient technologies.
• B)can explain why the economy fails to adopt the most efficient technologies.
• C)reduce the cost of switching to new technologies without network externalities.
• D)can explain why technological lock-in no longer occurs.

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Definitions:

Capital Account

A financial statement that shows the changes in ownership interest in a company over a period.

Salary Allowance

A fixed amount of money paid to employees, often as part of compensation for job-related expenses or allowances.

Interest Allowance

A provision or adjustment made for the calculation of interest receivable or payable over a specified period.

Fixed Ratio

A prescribed relationship between two quantities, expressed as a constant value.