A Network Externality Can Be Said to Exist When

question 37

Multiple Choice

A network externality can be said to exist when:

• A)a recording artist appears on a popular TV show leading to an increase in popularity and record sales; this is called the "snob effect".
• B)a recording artist appears on a popular TV show leading to an increase in popularity and record sales; this is called the "bandwagon effect".
• C)many people try to access the internet at the same time leading to a system crash.
• D)two television networks decide to merge.

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Definitions:

Constant Rate

A stable speed or frequency at which something happens or changes over a particular period of time.

Constant-Rate

Pertaining to a process or quantity that changes over time at an unvarying speed or amount.

Progressive Tax

A tax system where the tax rate increases as the taxable amount increases, placing a heavier burden on wealthier taxpayers.

Proportional Tax

A taxation system where the tax rate remains constant regardless of the amount subject to tax.