Some Economists Have Suggested That Network Externalities Result in Consumers

question 45

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 that

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

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Definitions:

Actual Authority

The express and implied powers given by a principal to an agent to enter into contracts or take action on the principal's behalf.

Good Faith

A sincere intention to deal fairly with others without any intention to defraud or seek an unfair advantage.

Duty Of Obedience

The legal or ethical obligation of individuals to act in accordance with the laws, rules, or regulations that govern their behavior or role, particularly in organizational or fiduciary contexts.

Authorized Contract

An authorized contract is a legal agreement that has been approved and executed by individuals or entities who have the legal capacity and authority to do so.