Which statement describes the tipping point in the market for a network good?
A) The firm can no longer raise prices while gaining customers but must lower prices to gain customers.
B) The firm has reached minimum ATC and will face rising ATC if it increases output.
C) The firm has a sufficient number of customers for network effects to support the network.
D) The firm is entering a vicious cycle.

Question

Quizplus · Accepted Answer

The tipping point in the market for a network good is when the firm has accumulated enough customers that the network effects (the value of the product or service increases as more people use it) begin to significantly enhance the product's value, encouraging more users to join.

Which Statement Describes the Tipping Point in the Market for a Network