One of the competitive advantages of a B2B service provider is that it can spread the cost of an expensive software system over many users, achieving efficiencies referred to as:
A)application efficiencies.
B)network efficiencies.
C)scale economies.
D)network externalities.

Question

Quizplus · Accepted Answer

Scale economies refer to the cost advantages that a firm can achieve by serving a larger number of customers or producing a higher volume of output. By spreading the cost of an expensive software system over many users, a B2B service provider can achieve scale economies, which allow it to offer competitive pricing and improve profit margins. Options A and D are not correct as application efficiencies and network externalities refer to different concepts. Option B is partially correct as network effects can be a source of competitive advantage, but it does not specifically refer to the cost savings achieved through economies of scale.

One of the Competitive Advantages of a B2B Service Provider