Which of the following examples best illustrates indirect network externalities?

Question

Quizplus · Accepted Answer

Indirect network externalities occur when the value created by one product or service leads to the creation of another product or service. In this example, the success of the cell phone company's platform leads to the creation of innovative software and cell phone accessories, which in turn increases the value of the original platform. Options A, B, and D all describe direct network externalities, where the value of the product or service is directly affected by the number of users or customers.

Which of the Following Examples Best Illustrates Indirect Network Externalities