Exam 14: Network Goods

Twitter and Facebook are products that can be classified as network goods.

What is a difference between "core users" and "casual users" of a network good, both in terms of when they purchase the product and the corresponding slope of the demand curve?

What explains the change in slope of a network demand curve?

A country club is not a social network because its members do not meet online.

When a consumer joins a network, the value of the network to potential users rises.

A strategy of packaging several products into a single bundle with a single price is

A common format used by software and other products is known as

GoGo Games awards its loyalty-program customers with points for each online game they buy. Those points can be used to buy future games at discounted prices. This is an example of

To ensure that no firm has exclusive access to a set of customers, governments try to promote

Draw a graph with a network demand curve and a marginal cost curve; use it to show when a vicious cycle and a virtuous cycle would be expected to occur.

(Figure: Externalities and Network Effects) Based on the graph, we see that if a consumer joins the social network depicted

Customers who purchase a network good after it matures are called core users.

(Figure: Understanding Network Good Markets) The graph depicts the market for a network good. What does G represent?

Which point would represent a vicious cycle if a firm stays there too long?

Network externalities are subject to diminishing returns.

BlackBerry, MySpace, and PlayStation are all products that have lost status as market leaders.

The Apple Watch was released in the market in 2015 as an edition model. This is an example of a

An increase in supply leads to an increase in price for a small network with a fixed capacity and a decrease in price for a non-network good.

Some county fairs offer reduced admission on weekdays before 4 P.M. because there are larger crowds at night. This is BEST described as an example of

(Figure: Market Demand Curve) The graph depicts a network market demand curve. The network effect and price effect have the same magnitude at the highest point on the curve.