Network externalities:
A) increase the likelihood that an industry will become a winner-take-all industry.
B) increase competition among existing firms in a market.
C) weaken forces that lead to monopoly in an industry.
D) promote the entry of new firms in a market.

Question

Quizplus · Accepted Answer

Network externalities increase the value of a product or service as more people use it, which can lead to a winner-take-all scenario where one firm dominates the market due to the large user base it has attracted.

Network Externalities