Why are high-technology industries likely to show increasing returns?
A) when upfront costs are high and marginal costs are high, unit costs drop as volume increases
B) due to a steep learning curve, as a firm produces more, its cost increase
C) network externalities allow the company to raise prices as they sell more
D) all of the above

Question

Quizplus · Accepted Answer

Network externalities in high-technology industries mean that as more people use a product, its value increases, allowing companies to potentially raise prices and benefit from increasing returns.

Why Are High-Technology Industries Likely to Show Increasing Returns