Multiple Choice

-Why does a network externality arise?
A) Each additional unit of a good sold reduces the value of the previously sold units.
B) As more and more units of a good are produced, the average cost declines.
C) Consumption of a good by one user does not affect the consumption of subsequent users.
D) The firms enjoy economies of scale in the long run.
E) Each additional unit of a good sold increases the value of the previously sold units.
Correct Answer:
Verified
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