Which of the Following Statements About Network Economics Is Not

question 91

Multiple Choice

Which of the following statements about network economics is not true?

• A) eBay is an example of a business model that is based on the principle of network economics.
• B) The law of diminishing returns does not always apply to every situation.
• C) From a network economics perspective, the value of a community of people grows as the number of participants in the community increases.
• D) Information technology can be strategically useful from a network economics perspective.
• E) In network economics, the marginal cost of adding new members to the network is higher than the marginal gain.

---

Definitions:

Actual Stock Price

The current trading price of a company's shares on the stock market.

Required Return

This is the percentage yield that an investor expects to earn from an investment to make it worthwhile.

Common Share

A type of equity share that represents ownership in a company, granting the holder voting rights and a share in the company's profits through dividends.

Intrinsic Value

The estimated true value of an asset, based on underlying perceptions of its true financial performance and future prospects.