Indirect Network Externalities Exist If

question 22

Multiple Choice

Indirect network externalities exist if:

• A)the target market of the product is extremely small.
• B)the product is an imitation of a popular product.
• C)product sales are dependent on sales of complementary products.
• D)the profit margin for the product is very high.

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Definitions:

Private Saving

The portion of households' income that is not used for consumption or paying taxes, but instead is saved.

National Saving

The total amount of savings generated within a country, calculated as the sum of private savings (by individuals and businesses) and public savings (government surplus), which is critical for funding investment.

Disposable Income

The amount of money a household has available for spending and saving after income taxes have been accounted for.

Private Saving

The portion of an individual's or entity's income that is not spent on consumption or paid in taxes and is instead saved.