Many Economists Do Not Believe That Network Externalities Lock Consumers

question 117

Multiple Choice

Many economists do not believe that network externalities lock consumers into the use of products that have technology inferior to other, similar products.These economists believe that

• A)consumers are always rational.
• B)in practice, the gains from using a superior technology exceed the losses consumers incur from switching costs.
• C)there is no good evidence that switching costs exist.
• D)the government will prevent products with inferior technology from being sold to consumers.

---

Definitions:

Exporting

Conducting transactions involving the sale of items or services from one country to customers located in another nation.

Direct Investment

Acquiring a majority ownership stake in a foreign company by an entity from another nation, representing an investment.

Joint Venture

A commercial enterprise undertaken jointly by two or more parties that otherwise retain their distinct identities, sharing the investment, risks, profits, and losses.

Marketing Control

A method used to evaluate the effectiveness of marketing strategies and ensure that marketing objectives are being met.