Can you tell when negative network externalities are present? Answers: A. the de
ID: 1134145 • Letter: C
Question
Can you tell when negative network externalities are present?
Answers:
A.
the demand curve is less elastic than otherwise.
B.
the demand curve shifts to the left.
C.
the demand curve is more elastic than otherwise.
D.
the demand curve shifts to the right.
Can you tell when negative network externalities are present?
Answers:
A.
the demand curve is less elastic than otherwise.
B.
the demand curve shifts to the left.
C.
the demand curve is more elastic than otherwise.
D.
the demand curve shifts to the right.
Explanation / Answer
A. the demand curve is less elastic than otherwise
Negative network externalities indicates the presence of snob effect. It means people wish to own the prestige valued good. So, in this case, as price of the commodity decreases, more people are able to afford the good and thereby its prestige value decreases. More people demand the good but the percentage change in quantity demanded is less than the percentage change in price so the demand curve is less elastic than otherwise
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.