Transactional Psychological Contracts Tend to Occur in Short-Term Economic Exchanges

question 2

True/False

Transactional psychological contracts tend to occur in short-term economic exchanges where responsibilities are precisely defined.

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Definitions:

Network Externalities

The effect that one user of a good or service has on the value of that product to other people, where the value increases as the number of users rises.

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output.

Natural Monopoly

A monopoly that exists when increasing returns to scale provide a large cost advantage to having all output produced by a single firm.

Network Externalities

The effect that an additional user of a good or service has on the value of that product to others, often positive, as in the case of telecommunications networks.