Which statement is TRUE with regards to network goods?
A) The market leader for a network good is always the best quality product available.
B) Changes in market share for network goods are usually very slow.
C) It is possible that a market leader for a network good can quickly descend into a vicious cycle.
D) Market leaders for network goods usually remain in their top spots for at least a decade.

Question

Quizplus · Accepted Answer

Network goods exhibit network externalities, where the value of the product increases as more people use it. This can lead to rapid changes in market dynamics, including the possibility of a market leader quickly losing its position if a significant number of users switch to a competing product, creating a vicious cycle of declining network value and further loss of users.

Which Statement Is TRUE with Regards to Network Goods