When positive network effects are present, platform markets exhibit a particular kind of economy of scale.

Question

Quizplus · Accepted Answer

Positive network effects mean that the value of a platform or product increases as more people use it. As more users join a platform market, the platform becomes more valuable to all users, creating a self-reinforcing cycle. This leads to a kind of economy of scale where increased usage results in increased value for all participants.

When Positive Network Effects Are Present, Platform Markets Exhibit a Particular