Network externalities are:
A)The set of effects related to the network organizational structure, where many firms are connected through loose but efficient linkages
B)The idea that the value of a product for a customer depends on the number of other users of the same product
C)The costs incurred outside a firm when these costs are a direct consequence of that firm's activity
D)The set of events, facts, and trends taking place in a firm's environment and that may impact its strategy

Question

Quizplus · Accepted Answer

Network externalities refer to the idea that the value of a product or service increases as more people use it. This means that the product or service has a higher utility for the consumer when more people are using it, creating a positive externality for other consumers. For example, the value of a social networking site like Facebook or Twitter increases as more people use it because there are more opportunities for connection and communication.

Network Externalities Are