A Network Must Be Small If Network Externalities Are to Be

question 6

True/False

A network must be small if network externalities are to be huge.

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Definitions:

Variable Input

An input in the production process that changes quantity with the level of output, such as labor or raw materials.

Marginal Revenue Product

The additional revenue generated from using one more unit of a factor of production, key in making decisions on resource allocation.

Profit-maximizing

A strategy or process utilized by businesses to determine the price and output level that results in the highest profit.

Labor Cost

The total sum of all compensation given to employees for their services, including wages, benefits, and payroll taxes.