An Example of a Good That Creates a Positive Network

question 55

Multiple Choice

An example of a good that creates a positive network externality is:

• A) the telephone.
• B) social network websites (e.g. Facebook).
• C) a workers' union.
• D) All of these are examples of good that create positive network externalities.

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Definitions:

Supply Curve

A graphical representation of the relationship between the price of a good and the quantity of the good supplied.

Demand Curve

A graphical representation showing the inverse relationship between the price of a good or service and the quantity demanded by consumers.

Demand

The desire and ability of consumers to purchase goods and services at given price levels.

Economic Theory

A set of principles and models that explain how economies function and how economic agents interact.