Direct network externalities exist if product sales are dependent on:
A) sales of complementary products.
B) sales of competitive products.
C) the number of people that have adopted the product.
D) the primary demand for other older products.

Question

Quizplus · Accepted Answer

Direct network externalities occur when the demand for a product is influenced by the number of people who already use it. This can include products like social media platforms or messaging apps, where the value of the product increases as more people join and use it. Sales of complementary or competitive products may also impact a product's sales, but they are not examples of direct network externalities. Similarly, the primary demand for older products does not necessarily impact the sales of a newer product with direct network externalities.

Direct Network Externalities Exist If Product Sales Are Dependent On