In this chapter, the term positive network externality describes:
A)the positive effect of consuming chocolate as income rises.
B)the snob effect.
C)the bandwagon effect.
D)the impact of a polluting firm on its local environment.

Question

Quizplus · Accepted Answer

Positive network externality refers to the phenomenon where the value of a product or service increases as more people use it. The bandwagon effect is an example of this, where people are more likely to adopt a particular product or behavior if they see others doing the same. The other choices are not related to positive network externalities. Positive network externality refers to the phenomenon where the value of a product or service increases as more people use it. The bandwagon effect is an example of positive network externality, where consumers are more likely to adopt a product or service if they see others using it. The other options - A, B and D - are not directly related to the concept of positive network externality.

In This Chapter, the Term Positive Network Externality Describes