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Discuss the importance of transaction costs.
How are businesses harnessing the power of network effects during the COVID-19 pandemic?
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- Explain why the cost structure associated with many kinds of information goods and services might imply a market supplied by a small number of large firms. (At the same time, some Internet businesses such as grocery home deliveries have continually suffered steep losses regardless of scale. Explain why.) Could lower transaction costs in e-commerce ever make it easier for small suppliers to compete? As noted in the previous chapters, network externalities are often an important aspect of demand for information goods and services. (The benefits to customers of using software, participating in electronic markets, or using instant messaging increase with the number of other users.) How might network externalities affect firm operating strategies (pricing, output, and advertising) and firm size?A firm is contemplating the establishment of a potential two-way network linking 100 users. A feasibility study reveals that each user is willing to pay an average of $1 for each potential connection service provided by the network. If the total cost of establishing the network is $500,000, should the firm establish the network? Explain.give me correct answer with proper explanation A network effect, or network externality, exists when: Group of answer choices a firm ’ s average total cost rises continuously over the entire ran the customers of one business overlap with those of another competing business. the costs of resources for an industry rises as the number of sellers in an industry expands. the value of a product or service to each consumer increases as the number of users expands.
- Although self‑driving cars are still not trusted by most consumers, demand for them among technology enthusiasts has encouraged auto manufacturers to invest huge sums of money into their development. a. Self‑driving cars are currently on the a.upward‑sloping b.downward‑sloping portion of the network demand curve. b. Since every major automaker is investing in self‑driving technology, the industry a.has not reached b.has reached its tipping point.A firm is considering building a two-way network that links 12 users. The cost of building the network is $10,000. a. How many potential connection services does this network provide? b. If each user is willing to pay $150 to connect to the network, will the firm profit by building the network? c. If each user is willing to pay an average of $12 for each potential connection service provided by the network, will the firm profit by building the network? d. What happens to the number of potential connection services if one additional user joins the network?Provide an example of a company which operates on market as two one- sided platforms, describe sides and network effects.
- Why does Pinterest see Google as its biggest competitor? Why does Pinterest prioritize the smartphone platform while developing new features and products?the use of social media as a tool for communication is on a rise in society today. As it relates to education, discuss two possible benefits of using social media as well as two challenges students are likely to face.Logitech earned a profit of Rs 200 for selling 5 CDs having cost of production as Rs 50. What could be the price of one CD? (no pic required solve here completely, if possible)Required to answer. Multi Line Text. Due to COVID-19 industries are shut down in most of the countries and they are either producing nothing or minimum out put during lock down. Does it effect fixed and variable costs both? elucidate.Required to answer. Multi Line Text. How is prisoner’s dilemma game similar to a cartel?Required to answer. Multi Line Text.
- Question 2: The concept of _____ is based on the idea that the value of a network will increase when others share it, and refers to the ways that higher or wider usage of certain products or services confers greater value for all users. A Network webbing B Network effect C Intra-networkExercise 6.6. Consider a duopoly in which companies compete according to Cournot's model. The inverse market demand curve is: P(Q)=100-Q , where Q=Q1+Q2 and the average and marginal costs of firms are constant and equal to 40 Calculate profits would each company make? How much would company 1 be willing to invest to reduce its CM from 40 to 25, assuming company 2 does not support it? Graphically show and comment on all results.Distinguish between the following concepts. Use practical examples where applicable. Positive network externality and negative network externality. Economies of scale and learning curve (providing reasons why each may occur). Monopolistic competition and oligopoly. Peak-load pricing and intertemporal price discrimination.