Although Some Economists Believe Network Externalities Are Important Barriers to Entry

question 224

Multiple Choice

Although some economists believe network externalities are important barriers to entry, other economists disagree because

• A)they believe that the dominant positions of firms that are supposedly due to network externalities are to a greater extent the result of the efficiency of firms in offering products that satisfy consumer preferences.
• B)they believe that most examples of network externalities are really barriers to entry caused by the control of a key resource.
• C)network externalities are really negative externalities.
• D)they believe that the dominant positions of firms that are supposedly due to network externalities are to a greater extent the result of economies of scale.

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Definitions:

Cumulative Probability

The probability that a random variable takes on a value less than or equal to a specific value, aggregating across all previous probabilities.

Random Number Intervals

The ranges between which randomly generated numbers fall, used in simulations and probabilistic analyses.

EOQ Methodology

The Economic Order Quantity method calculates the optimal order size to minimize the costs of holding inventory and stock ordering, balancing demand with inventory costs.