Exam 14: Network Goods

A consumer who has a very high willingness-to-pay for a new product or service and is among the first to purchase it is a(n) _____ user.

Which of these is NOT an example of interconnection?

Interconnection is the physical linking of a network to another network's essential facilities.

People who use Sony's PlayStation 4 gaming system are members of a _____ network.

In the long run, interconnection creates a more competitive environment that in turn leads firms to cut costs.

Techniques used by firms to raise the switching costs for its customers are called

Aztec and Zenon are the only two competitors in a network industry. Consumers and experts all agree that Aztec has a superior product. It follows that Aztec is the market leader.

Explain how the underlying cost structure and economies of scale make certain products network goods.

In the market for a network good, the private demand curve lies to the right of the social demand curve.

Home Internet services are often sold at a lower price for the first 12 months of service. This is BEST described as an example of

Graphically show how a network market demand curve is developed. How does this differ from the market for a non-network good?

When there are network effects, a reduction in the number of users will

Greyhound Lines offers a discount for bus tickets purchased in advance. This is BEST described as an example of