A standard which came to the market first, such as the QWERTY letter layout in typewriters, can become entrenched (this layout is still used in computer keyboards today).This phenomenon is called
A)network externalities
B)path dependency
C)sunk cost
D)comparative advantage

Question

Quizplus · Accepted Answer

Path dependency refers to the tendency of a technology or standard to become entrenched due to historical or technological factors, even if a better alternative becomes available later on. The QWERTY letter layout in typewriters is a classic example of path dependency, as it is still used in modern computer keyboards despite being designed to address mechanical limitations that are no longer relevant. Network externalities refer to the value that a technology or product generates by virtue of being adopted widely, while sunk costs refer to the expenses that have already been incurred and cannot be recovered. Comparative advantage refers to the ability of a country or firm to produce a good or service more efficiently than others. While some of these concepts may be related to path dependency, B is the best answer.

A Standard Which Came to the Market First, Such as the QWERTY