Which of the following firms is the best example of one that has achieved its monopoly advantage because of network externalities?
A) General Motors
B) General Electric
C) Alcoa
D) Union Pacific Railroad
E) Microsoft

Question

Quizplus · Accepted Answer

Microsoft has achieved its monopoly advantage because of network externalities. The more people use Microsoft's operating system and software, the more valuable it becomes for others to use it as well, leading to a self-reinforcing cycle of network effects. This can make it difficult for competitors to gain market share, as switching costs for users would be high. The other options, such as General Motors or Union Pacific Railroad, do not have the same network effects associated with their products or services.

Which of the Following Firms Is the Best Example of One