If a network company attracts new customers, there is more incentive for further customers to join, which enables the firm to lower prices which attracts new customers (and so on) ......What is happening here?
A) A perfect market is forming
B) A negative feedback loop
C) A positive feedback loop
D) A monopoly is forming

Question

Quizplus · Accepted Answer

This scenario describes a positive feedback loop, where the initial action (attracting new customers) leads to further actions that reinforce and amplify the initial effect (attracting even more customers).

If a Network Company Attracts New Customers, There Is More