When network effects are important, then an industry can experience
A) positive market feedback.
B) prince-leadership.
C) a zero-sum game.
D) a vertical merger.

Question

Quizplus · Accepted Answer

When network effects are important, positive market feedback occurs. This means that as more people use a product or service, the value of that product or service increases, leading to more adoption and usage. This creates a virtuous cycle where the product becomes more valuable over time. Therefore, positive market feedback is the most appropriate choice for this question. B) Price-leadership refers to a strategy where a dominant firm in a market sets the price and other firms follow. C) A zero-sum game is a situation where one person's gain is another person's loss. D) A vertical merger is a merger between two companies that operate at different stages of the same supply chain.

When Network Effects Are Important, Then an Industry Can Experience