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A Network Effect Generally Pushing Prices _____ as the Network

question 79

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A network effect generally pushing prices _____ as the network expands, and the price effect generally pushes prices _____ as the network expands.


Definitions:

Price Ceiling

A maximum legal price above which a product cannot be sold; to have an impact, a price ceiling must be set below the equilibrium price.

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, resulting in market balance.

Shortage

A market condition characterized by the demand for a product exceeding its supply, often leading to increased prices.

Equilibrium Price

The price at which the quantity of a product offered for sale matches the quantity being demanded, resulting in no net surplus or shortage in the market.

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