A Network Externality Occurs When

question 193

Multiple Choice

A network externality occurs when

• A)there is production cost savings from being networked with suppliers.
• B)there is production cost savings from being networked with buyers.
• C)the usefulness of a good is affected by how many other people use the good.
• D)the usefulness of a good is affected by celebrities who use the good.

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Definitions:

Product Life Cycle

The evolutionary path a product follows, starting with its market introduction, moving through growth, reaching maturity, and ultimately experiencing decline.

Low-Learning

A situation or condition where minimal learning or skill acquisition occurs, often due to lack of resources, engagement, or inherent interest.

Product Adopters

Individuals who purchase or use a new product early in its life cycle, typically categorized by their willingness to adopt innovations.

Diffusion of Innovation

A theory that describes how, why, and at what rate new ideas and technology spread through cultures, from inception to widespread adoption.