An advantage of Microsoft Windows is its compatibility with the widest range of hardware and software.The dominance of Windows is self-reinforcing: hardware and software manufacturers ensure that their products are compatible with Windows in order to have access to the large number of Windows users.This scenario is best described by
A)endowment effects
B)endorsement effects
C)economies of scale
D)network externalities

Question

Quizplus · Accepted Answer

This scenario is best described by network externalities, which refer to the positive effects that a network of users has on the value of a product or service. In the case of Windows, the large number of users creates a value for hardware and software manufacturers to ensure compatibility, which in turn reinforces the dominance of Windows.

An Advantage of Microsoft Windows Is Its Compatibility with the Widest