Why do economies of scale and monopoly power exist with network goods?
A. Many small firms must develop to serve all of the consumers willing to pay for access to the network good, so their costs are driven down.
B. Network goods require a group of sellers working together and this cooperation reduces the firms' cost per unit.
C. Just as the value of a network good decreases to each user as the total number of users increases, so does the long run average cost decrease as output increases.
D. As the number of people connected to a network increases, the greater the benefits each person gets and the smaller the cost per unit to supply.
Answer: D
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If the wage is below the marginal revenue product, then a profit-maximizing firm will
a. employ more workers b. employ fewer workers c. see an increase in its demand for labor d. see an increase in its supply of labor e. see a fall in its demand for labor
Which of the following is true under unregulated monopoly?
a. Monopoly results in more output than under pure competition. b. Monopoly results in a more efficient allocation of resources than competition. c. Monopoly expands the choices available to consumers. d. Monopoly results in lower output and higher prices than competition.
The coupon rate on newly issued bonds is usually ________ for bonds with favorable tax treatment, such as municipal bonds, and ________ for bonds that are very risky, such as junk bonds.
A. lower; higher B. higher; higher C. higher; lower D. lower; lower
Most of the debates in the U.S. Congress center on
A) efficiency concerns. B) equity concerns. C) both efficiency and equity equally. D) market inefficiency.