Exam 14: Network Goods

A firm owns a network when it becomes the industry standard.

Network goods often involve substantial diseconomies of scale in the production process.

Network goods often have _____ costs.

(Figure: Market for a Network Good 2) The graph depicts the market for a network good. Point _____ represents a point where a _____ cycle takes hold.

If demand for a network good falls to the right of the tipping point, then it will lead to a vicious cycle.

(Figure: Network Market Demand Curve) The graph depicts a network market demand curve. Along the quantity axis (x axis), customers who purchase the good after it matures, fall on the _____ portion and people who buy it before it matures fall on the _____ portion.

(Figure: Market Equilibrium for a Network Good) Based on the graph, we see that a vicious cycle is MOST likely to occur if the network is currently at point

Requiring firms to interconnect with competitors leads to _____ competition and _____ deadweight loss.

Network monopolies are often long-lived.

Network goods got their start in the 1990s, with the advent of the Internet.

The tipping point from which a virtuous cycle may generate occurs at which point on a network demand curve?

(Table: Online Dating Web Sites) From the table, which Web site appears to be attracting core users but not casual users? Web Site Number of Members Price per Month Mecting Place 2,000 \ 10 Find a Mate 20.000 \ 15 Looking for One 80,000 \ 20 Friend or More 150,000 \ 10

Use supply and demand curves to illustrate the network effect.

Which of these is NOT a type of network?

A network connected by a transportation route is a _____ network.

(Figure: Market for a Network Good 2) The graph depicts a market for a network good. Point G represents equilibrium after a virtuous cycle takes hold.

The Internet created a rise in the importance of network goods.

When one makes a call to someone who is using a different cellular provider, what must occur between the two networks in order for the call to be connected?

When a network has a fixed capacity, the corresponding supply curve is

Which statement describes the tipping point in the market for a network good?