If network externalities exist in an industry,the ________ firm to enter the market is often the one that succeeds in dominating the industry.
A) first
B) second
C) third
D) fourth
E) fifth

Question

Quizplus · Accepted Answer

Network externalities occur when the value of a good or service increases as more people use it. In such industries, the first firm to enter the market gains a significant advantage over later entrants because it establishes a larger network of users. The larger the network, the greater the value of the good or service, creating a barrier to entry for new firms. This often leads to a winner-takes-all scenario, where the first-mover dominates the industry.

If Network Externalities Exist in an Industry,the ________ Firm to Enter