When a virtuous cycle is impacting the market for a network good
A) output rises beyond equilibrium, allowing the firm to earn extra profits.
B) the demand curve is shifts to the left.
C) the firm is viable and able to expand and gain value due to network effects.
D) there is momentum for the firm to expand rapidly to reach its tipping point.

Question

Quizplus · Accepted Answer

A virtuous cycle in the market for a network good means that as more people use the product, its value increases, leading to more users and further increasing its value. This makes the firm viable and able to expand due to positive network effects.

When a Virtuous Cycle Is Impacting the Market for a Network