Due to network externalities,the benefit from using eBay to buy and sell goods decreases with the number of users of eBay.

Question

Quizplus · Accepted Answer

Due to network externalities, the benefit from using eBay to buy and sell goods increases with the number of users of eBay. This is because as the number of users increases, there are more buyers and sellers on the platform, which increases the variety and availability of goods, lowers transaction costs, and creates a larger potential audience for sellers. Therefore, more users lead to a higher value of the platform for all users.

Due to Network Externalities,the Benefit from Using EBay to Buy