The demand curve for a network good indicates that as more people consume the good
A) the network effect is consistent in strength.
B) there are positive and negative externalities associated with consumption.
C) the returns to the network effect rise then diminish.
D) casual but curious consumers try the product first, while the core users come later.

Question

Quizplus · Accepted Answer

As more people consume a network good, the value of the good increases due to the network effect, leading to rising returns initially. However, as the market becomes saturated, the returns to the network effect may diminish.

The Demand Curve for a Network Good Indicates That as More