Some Economists Have Suggested That Network Externalities Result in Consumers

question 45

Multiple Choice

Some economists have suggested that network externalities result in consumers being locked into the use of products with inferior technologies.Economists Stan Leibowitz and Stephen Margolis have studied cases that have been cited as examples of this and found that

• A)there is no convincing evidence that the alternative technologies were superior.
• B)consumers sometimes do become locked into the use of products with inferior technologies.
• C)in all of these cases, network externalities resulted in market failure.
• D)consumers use products with inferior technologies when their prices are lower than products with superior technologies.

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