6. Network monopolies The value of a network good decreases OR increases as the

Question

6. Network monopolies

The value of a network good decreases OR increases as the expected number of units sold increases.---

Which of the following is an accurate description of the current antitrust policy for network monopolies? pick one.

----The authorities would issue a complaint if the network monopoly raises the price of the network good.

-----The authorities would issue a complaint against a network monopoly regardless of how the company behaves.

----The authorities would issue a complaint if the network monopoly undertakes predatory practices to maintain its monopoly position.

Explanation / Answer

1. The value of a network good decreases OR increases as the expected number of units sold increases.-INCREASES. [Explaining by an example, telephone is a network good and one purchases the telephone to network with other people. It is of little value when only 10 or 50 people buy but if 1000 or more people buy then its value increases].

2. Which of the following is an accurate description of the current antitrust policy for network monopolies? pick one.

---The authorities would issue a complaint if the network monopoly undertakes predatory practices to maintain its monopoly position.

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