Due to the network externalities in the game console market, we would expect this market to
A) overproduce game consoles.
B) be highly concentrated.
C) be efficient.
D) be serviced by a natural monopoly.

Question

Quizplus · Accepted Answer

Network externalities in the game console market lead to a situation where the value of a product increases as more people use it. This tends to favor established players and can lead to a highly concentrated market where a few firms dominate because they benefit from a larger user base, which in turn attracts more game developers and more users.

Due to the Network Externalities in the Game Console Market