How do network effects benefit established businesses?
A) It allows consumers to find a variety of goods and services in one place.
B) Transportation costs are decreased, and the concentration of many people and firms in a particular area leads to greater innovation by existing firms and new ones.
C) It doesn't benefit established businesses.
D) It allows the established business to learn about its competitors, thus allowing it to lower prices and compete more effectively.

Question

Quizplus · Accepted Answer

Network effects benefit established businesses by creating a concentration of many people and firms in a particular area, leading to greater innovation by existing firms and new ones. This can lead to reduced transportation costs and increased opportunities for collaboration and knowledge sharing among businesses.

How Do Network Effects Benefit Established Businesses