Network effects arise in industries where the size of the "network" of complementary products is a primary determinant of demand for an industry's product.

Question

Quizplus · Accepted Answer

This statement correctly describes network effects, which occur when a product's value increases as more users adopt it, leading to a positive feedback loop of increasing demand for complementary products or services. Examples of industries with strong network effects include social media platforms, online marketplaces, and communication networks.

Network Effects Arise in Industries Where the Size of the "Network