Use the following statements to answer this question: I. A network externality is a situation in which each individual's demand depends on the purchases of other buyers. II
Network externalities are mainly positive effects resulting from the actions of others, while ordinary externalities are mainly negative effects resulting from the actions of others. A) I and II are true.
B) I is true and II is false.
C) I is false and II is true.
D) I and II are false.
B
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________ means people are more unhappy when they suffer losses than they are happy when they achieve gains
A) Loss fundamentals B) Loss aversion C) Loss leader D) Loss cycle
Total profit equals
A. TR ? TC. B. average profit times total output. C. total sales revenue minus total cost. D. All of the responses are correct.
A situation in which each firm selects its best action, given what its rivals are doing, is called a
A) Nash equilibrium. B) Cooperative equilibrium. C) Stackelberg equilibrium. D) zero sum game.
Which of the following is not an idea advocated by Adam Smith?
a. Businesspersons conspiring to fix prices are a threat to the price system. b. Pursuit of private self interest with an invisible hand is the best way to promote the public interest. c. Government should control the economy. d. The government should provide for national defense and little else.