A network effect exists when A. firms are strategically interdependent. B. the w

Question

A network effect exists when A. firms are strategically interdependent. B. the willingness to purchase a good depends on how many others have purchased it. C. there are many firms in the market, and all have similar costs. D. market products are connected to each other.

NegativeNegative market feedback means that A. a good loses popularity because other consumers have chosen not to buy it.a good loses popularity because other consumers have chosen not to buy it. B. a good loses popularity because other consumers have chosen to buy it.a good loses popularity because other consumers have chosen to buy it. C. a good comes into favor because other consumers choose to buy it.a good comes into favor because other consumers choose to buy it. D. a good comes into favor because other consumers have chosen not to buy it.a good comes into favor because other consumers have chosen not to buy it.

Explanation / Answer

B. the willingness to purchase a good depends on how many others have purchased it.

(the network effect may also be to favour a particular standard or technology that is nonetheless used by several competitors)

A. a good loses popularity because other consumers have chosen not to buy it.

( executing a losing trade causes an investor to question his or her skill and discourages him or her from continuing to trade-negative market feedback).

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