If a product has a large network effect, it will lead to
A)a large congestion effect.
B)a small number of consumers using the product and a decreased demand for the product.
C)greater marginal benefits from using the product and increased demand for the product.
D)smaller marginal benefits from using the product.

Question

Quizplus · Accepted Answer

A large network effect means that using the product becomes more valuable as more people use it. This leads to greater marginal benefits from using the product, which in turn increases demand for the product.

If a Product Has a Large Network Effect, It Will