Some Economists Have Suggested That Network Externalities Result in Consumers

question 189

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

• 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)that in all of these cases network externalities resulted in market failure.
• D)that consumers use products with inferior technologies when their prices are lower than products with superior technologies.

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Definitions:

Anxiolytics

Medications designed to reduce anxiety and its related disorders, acting on the central nervous system.

Pharmacodynamics

The branch of pharmacology dealing with the effects of drugs and the mechanisms of their action in the body, including drug-receptor interactions.

Economic Context

The financial environment in which businesses and individuals operate, including factors like job market, inflation, and fiscal policy.

Political Context

The political environment and activities that influence policies, decisions, and societal attitudes.