Apple, Which Controls Over 75 Percent of Digital Music Sales

Multiple Choice

Apple, which controls over 75 percent of digital music sales, was able to dictate song pricing for years, despite the tremendous protests of the record labels. This implies that:

A) despite the presence of network effects, the music industry is not dominated by any single leader.
B) the presence of multiple new entrants forces leading firms to drop prices of their offerings.
C) firms with strong network effects enjoy substantial bargaining power over partners.
D) a dominant market share does not necessarily translate to greater profitability for a firm.
E) firms with significant market share can leverage network effects to overtake prior market leaders.