A network externality occurs when ________.
A) the value of a product increases as more consumers start to use it
B) firms collude to sell products at a price higher than the equilibrium market price
C) a firm that has control over key resources auctions the resources off to other firms
D) the government interferes to prevent the concentration of market power in the hands of a few firms

Question

Quizplus · Accepted Answer

A network externality occurs when the value of a product increases as more consumers start to use it. This can be due to increased compatibility, ease of communication, or network effects that occur when more people use the product.

A Network Externality Occurs When ________