The external benefit of an additional subscriber to a network is shown as the horizontal distance between the private demand curve and the social demand curve.

Question

Quizplus · Accepted Answer

The external benefit of an additional subscriber to a network is represented by the vertical distance between the private demand curve and the social demand curve, not the horizontal distance. This vertical distance illustrates the additional value or benefit to society that is not captured by the private market demand.

The External Benefit of an Additional Subscriber to a Network