What Is a Significant Downside to Network Externalities

question 4

Multiple Choice

What is a significant downside to network externalities?

• A)There may be large switching costs to consumers for changing products so that consumers end up using products with inferior technologies.
• B)Firms may network with unethical suppliers or distributors.
• C)The costs of hiring celebrity endorsements may be very high.
• D)There may be large switching costs to firms changing technologies.

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Definitions:

Median

The middle value in a sorted list of numbers, which divides the data set into two halves.

IQR

Interquartile range, a measure of statistical dispersion being the difference between the 75th and 25th percentiles, or quartiles, in a data set.

Range

The difference between the highest and lowest values in a data set, giving an indication of the data's dispersion or variability.

Median

The middle value in a set of numbers, which separates the higher half from the lower half.