Why does network externality arise?

Question

Quizplus · Accepted Answer

Network externality arises when each additional unit of a good sold increases the value of the previously sold units. In other words, the value of a good is dependent on the number of users or consumers using it. This can be seen in products such as social media platforms, where the more users there are, the more valuable the platform becomes for each user. As such, network effects can create strong barriers to entry and can give early adopters a significant advantage.

Why Does Network Externality Arise