Firms with many customers that find it easier to attract new customers are most likely selling a good that has a ________ externality.
A) consumption
B) negative
C) positive
D) production
E) network

Question

Quizplus · Accepted Answer

Firms that find it easier to attract new customers when they already have many customers are likely selling a good that benefits from a network externality. This means the value of the good or service increases for each user as more people use it, typical of social networks, communication services, and platforms where a larger user base enhances the experience or utility for each participant.

Firms with Many Customers That Find It Easier to Attract