When Network Effects Are Important, Then an Industry Can Experience

question 72

Multiple Choice

When network effects are important, then an industry can experience

• A) positive market feedback.
• B) prince-leadership.
• C) a zero-sum game.
• D) a vertical merger.

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Definitions:

Positively Related

A term describing the relationship between two variables where they move in the same direction; when one increases, the other also increases, and vice versa.

Omitted Variable Bias

Omitted Variable Bias occurs in statistical models when a relevant variable is left out of the model, potentially leading to incorrect conclusions about the relationship between the variables of interest.

Broken Window Fallacy

The misconception that destruction and the subsequent spending to repair the damage stimulate economic growth.

Economic Activity

The activities related to the creation, dissemination, and utilization of products and services within an economy.