Which condition is required for a network good to succeed over a better good in

Question

Which condition is required for a network good to succeed over a better good in the market? The network good should have a minimal number of consumers so that customers are not competing for the same network The network good should have a much larger number of consumers or users than the better good. The network good should be a free good. All of these conditions are required. Which of the following best explains why cartel agreements are hard to maintain? Each firm in the cartel has the incentive to raise prices and earn larger profits. Each firm in the cartel has the incentive to increase production and earn larger profits. Cartels are typically very profitable for firms in the short run, but not in the long run. It is hard for each firm in the cartel to maintain a level of production equal to that of the other firms. Small tribes may be able to solve the tragedy of the commons by: subsidizing the activity that creates the tragedy. using social norms to punish and ostracize those that overuse a common resource, setting price controls below the equilibrium price to clear the market.

Explanation / Answer

3. C is Correct, Network Good Must be free for e.g. Facebook, Whats App Versus BBM, All are network goods and had created a space for themselves.

4. C is Correct, In long run Firms may cheat with each other.

5. B is Correct, as the tribes will punish a guy who will overuse the resource as it is a common resource and is beneficial for all the members of tribes.

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