Explain How Network Externalities Act as a Barrier to Entry

question 7

Essay

Explain how network externalities act as a barrier to entry.

Identify the trade-offs faced by workers in the labor market.

Understand the distinction between positive and normative statements within economic discourse.

Recognize the scope of microeconomics in studying the behavior of individual economic units like consumers and firms.

Understand the basics of market structures and the conditions for perfect competition.

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Definitions:

Punishment

Any event or object that, when following a response, makes that response less likely to happen again.

Positive Reinforcement

The reinforcement of a response by the addition or experiencing of a pleasurable stimulus.

Pleasurable Consequence

A positive outcome or reward that follows a behavior, making it more likely to occur again in the future.

Negative Reinforcement

The reinforcement of a response by the removal, escape from, or avoidance of an unpleasant stimulus.