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.

Assess how returns to scale affect long-run average costs.

Interpret the relationship between economies of scale, diseconomies of scale, and long-run cost curves.

Comprehend the relationship between output levels and average/marginal costs.

Grasp the idea of economies and diseconomies of scope.

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Definitions:

Standard Deviation

A measure of the amount of variation or dispersion in a set of values, indicating how spread out the values are around the mean.

Sales Receipts

Documents that provide proof of a transaction between a buyer and a seller.

Geometric Mean

The geometric mean is a measure of central tendency that is calculated by taking the nth root of the product of n numbers, often used for rates and ratios.

Growth Rate

The rate at which a company's sales, revenue, or other important metrics increase over time.