1. How can the pursuit of market power lead to the social good? A) It always lea
ID: 1220582 • Letter: 1
Question
1. How can the pursuit of market power lead to the social good?
A) It always leads to the lowest prices for the customers. (incorrect answer)
B) It can lead to innovation.
C) It leads to less product differentiation.
D) It can lead to price discrimination
2. Which of the following is NOT a result of the network effect?
A) Facebook is more valuable to a person the more friends use it.
B) eBay is more valuable to a buyer the more sellers there are. (incorrect answer)
C) eBay is more valuable to a seller the more buyers there are.
D) “Network effects” tend to limit the size of the firm.
Explanation / Answer
1. The answer is B as it leads to innovation. market power like demand and supply play great role to bring innovation in society. its a boon for the society. innovation always brings improvement of current situation.
2. the option is D) “Network effects” tend to limit the size of the firm.
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