An example of a good that creates a positive network externality is:
A) the telephone.
B) social network websites (e.g. Facebook).
C) a workers' union.
D) All of these are examples of good that create positive network externalities.

Question

Quizplus · Accepted Answer

All of these options create positive network externalities. The telephone allows individuals to communicate with one another, thus increasing the value of the device when more people have access to it. Social network websites like Facebook allow for increased social connection, communication, and access to information, again increasing in value as more users join. A workers' union also provides a positive network externality as it allows for collective bargaining, increased bargaining power, and improved working conditions for all members, which increases the overall value of union membership.

An Example of a Good That Creates a Positive Network