What Does the Network Layer Do? Where Does It Sit

question 113

Short Answer

What does the network layer do? Where does it sit in relationship to the other four layers of our simplified network model?

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Definitions:

Perfectly Competitive

Describes a market structure where numerous small firms compete against each other, and no single entity has market power to set the price of a homogeneous product.

Market Price

The price at which a good or service is offered in the marketplace, determined by supply and demand forces.

Marginal Cost

The increase in total cost that arises from producing an additional unit of output, reflecting the cost of producing one more unit.

Marginal Revenue

The added revenue that comes from the sale of an extra unit of a good or service.