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.

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.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter13: General Equilibrium And Welfare

Section: Chapter Questions

Problem 13.5P

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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.
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