Asked by
JADYN MONTGOMERY
on Nov 26, 2024Verified
Extensive network effects may drive a market toward natural monopoly because consumers tend to choose a common, standard product that everyone else is using.
Network Effects
The phenomenon where increased numbers of users or participants improve the value of a good or service.
Natural Monopoly
A situation where due to high fixed costs or other barriers, a single firm can supply a product or service to an entire market at a lower cost than what two or more firms could.
- Examine how natural monopoly and network effects influence market behavior.
Verified Answer
CM
Learning Objectives
- Examine how natural monopoly and network effects influence market behavior.