Network Externalities

question 97

Multiple Choice

Network externalities

• A)explain why switching costs fall as the size of a network increases
• B)are the service-industry equivalent of natural monopolies in goods-producing industries
• C)are more important in the short run than in the long run
• D)help explain why monopolies often do not last for very long
• E)can explain the dominance of existing firms in some industries

---

Definitions:

Income Earned

The compensation received by individuals for their participation in productive activities, typically through wages, salaries, or profits.

Henry George

A 19th-century economist known for his ideas on taxation, particularly the proposal that a single tax on land value could replace all other taxes, thereby improving economic equality and efficiency.

Rent

A regular payment made by a tenant to a landlord for the use of land, a building, or other property.

Landlords

Property owners who rent out land, residential, or commercial properties to tenants.