Network externalities, Microeconomics

Assignment Help:

NETWORK EXTERNALITIES

Till this point we have assumed that people's demands for good are independent of each other.

Actually, a person's demand can be affected by the number of other people who have purchased that good.

If this is the case, a network exists externality.

Network externalities can be negative or positive.

A positive network exists externality if the quantity of a good demanded by a consumer increases in response to an increase in the purchases by other consumers.

Negative network externalities are the opposite of it. 


Related Discussions:- Network externalities

#title.2. Profit maximization is theoretically the most sou., Ask question ...

Ask question #Minimu2. Profit maximization is theoretically the most sound but practically unattainable objective of business firms. In the light of this statement critically appra

Indifference curves between consumption goods and leisure, How many hours w...

How many hours will an individual allocate to leisure if their indifference curves  between consumption goods and leisure are concave to the origin? Show in figures and explain in

Arc elasticity, Arc Elasticity is defined below: Arc elasticity measure...

Arc Elasticity is defined below: Arc elasticity measures/calculates the "average" elasticity between two points on the demand curve. The formula is simply given as (change in q

Chemistry, Write the formulas to show the reactants and products for the fo...

Write the formulas to show the reactants and products for the following reactions. Assume that solutions are aqueous unless otherwise indicated. Represent substances in solutions a

Free good, Which of the following is a free good? Fresh water, forests in t...

Which of the following is a free good? Fresh water, forests in the northwestern United States, the advice of economists, or none of the above?

Foreign exchange: what is hard currency, International economic relations a...

International economic relations also depend, in large calculate, on monetary =issues.  You are unlikely to accept the Turkish Lire in payment for your wages in this country, easil

Externalities, what is externalities and market inefficiency

what is externalities and market inefficiency

What is gini coefficient, Q. What is Gini Coefficient? Gini Coefficient...

Q. What is Gini Coefficient? Gini Coefficient: A statistical measure of inequality. A Gini score of 0 signifies perfect equality (in which each individual receives the same inc

Explain labour intensity, Q. Explain Labour Intensity? Labour Intensity...

Q. Explain Labour Intensity? Labour Intensity: Ratio of labour effort expended, compared to total on-the-job compensated labour time. A higher ratio of labour intensity reflect

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd