Which of the Following Is Used to Explain Why a Consumer's

question 83

Multiple Choice

Which of the following is used to explain why a consumer's willingness to use Blackberry Messenger (BBM) increases as the number of other people who use Blackberry Messenger increases?

• A)network externalities
• B)market failure
• C)diminishing marginal utility
• D)the income effect of a price change

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Definitions:

Net Operating Income

Income derived from the main activities of a business, not including interest and tax deductions.

Variable Expenses

Costs that change in proportion to the activity of a business, such as raw materials and direct labor costs.

Fixed Expenses

Costs that do not change with the level of production or sales over a short period, such as rent or salaries.

Break Even

A financial situation where total costs equal total revenues, resulting in no net profit or loss.