In network industries in which monopolies can be created if network effects are strong, interconnection _____ competition and _____ deadweight loss.
A) decreases; decreases
B) decreases; increases
C) increases; decreases
D) increases; increases

Question

Quizplus · Accepted Answer

Interconnection in network industries increases competition by allowing more firms to participate in the market and decreases deadweight loss by ensuring that more consumers can benefit from network effects without being locked into a single provider.

In Network Industries in Which Monopolies Can Be Created If