Network Externalities

question 82

Multiple Choice

Network externalities

• A)can only exist when there are economies of scale.
• B)prevent the dominance of a market by one firm.
• C)exist when the usefulness of a product increases with the number of consumers who use it.
• D)are created when celebrity endorsements of products lead to a surge in the demand for those products.

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Definitions:

Profit

The financial gain achieved when the revenues generated from business activities exceed the expenses, costs, and taxes needed to sustain those activities.

Available Seat

A term often used in the transportation industry, referring to a seat that is unoccupied and can be reserved or purchased by a customer.

Load Factor

A measurement used in transportation to assess the efficiency of a carrier by comparing the amount of utilized space or weight capacity versus the total available.

Operating Expense

Expenses incurred during the normal functioning of a business, excluding the cost of goods sold and fixed costs.