A network effect exists when an individual consumer's demand for a good is affected by other individuals':

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The network effect occurs when the demand for a product or service increases as more people use it or adopt it. This is because the product becomes more valuable or useful when more people use it, and can sometimes create a barrier to entry for competitors. This effect is largely driven by the purchasing decisions of other individuals.

A Network Effect Exists When an Individual Consumer's Demand for a Good