A Significant Downside to Network Externalities Is That

question 56

Multiple Choice

A significant downside to network externalities is that

• A) there may be large switching costs to consumers of changing products so that consumers end up using products with inferior technologies.
• B) firms may network with unethical suppliers or distributors.
• C) the costs of hiring celebrity endorsements may be very high.
• D) there may be large switching costs to firms changing technologies.

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Definitions:

Tax Purposes

Considerations or actions undertaken in accounting or financial planning to minimize tax liabilities and comply with tax laws.

Accrual Accounting

An accounting method that records revenues and expenses when they are incurred, regardless of when cash is exchanged.

Accounting Standards

Agreed-upon principles that govern the reporting and preparation of financial statements, ensuring consistency and comparability across entities.