Tony has a cell phone, and his cell phone service provider is Verizon.When he calls his wife, Meleah, another Verizon customer, he does not have to pay for those minutes.The more Verizon customers there are in the market, the more benefit Tony receives.This is an example of:

Question

Quizplus · Accepted Answer

This scenario illustrates a network externality, which is a situation where the value of a good or service increases as more people use it. In this case, the more Verizon customers there are, the more valuable Tony's Verizon cell phone service becomes, since he can make free calls to more people.

Tony Has a Cell Phone, and His Cell Phone Service