What is likely to happen in the market for a network good when a new substitute product quickly gains popularity?
A) The tipping point moves to a smaller number of customers.
B) The cost curves for both firms shift upward.
C) The core users will remain loyal to the firm.
D) The market for the network good may enter a vicious cycle.

Question

Quizplus · Accepted Answer

When a new substitute product gains popularity, the network good may lose users, leading to a decrease in its value, potentially causing more users to leave and creating a vicious cycle.

What Is Likely to Happen in the Market for a Network