Question

Anti-trust policy may be different between a market for network goods and non-network, or traditional, anti-trust policy. What tension causes this?

A.Network goods are often produced by a monopoly or an oligopoly, but the low level of competition in the market in the market is balanced by the high level of competition for the market.

B.Network goods are often produced by a monopoly, but that is less important than the fact that the monopoly gained that position by producing the best good.

C. The network good may not be the best good, but that is balanced by the competition in the market.

D. Network goods are often produced by a monopoly or an oligopoly, but the low level of competition for the market is balanced by the high level of competition in the market.d

E. The monopoly profits are a reward for winning a standards war that is often costly.

F. Monopolies are equally inefficient for network and non-network goods. Politics are the only reason that anti-trust is different for network goods.

Answer 1

Network goods is the term used to reflect upon the good exhibiting network effect orthe demands and the value for the product is dependent upon how many other people's peoples are using the same for example Telephones,mobile,social networking sites since those will have value only if people are using those product and value diminishes with lower number of people using them.

Anti trust policies are framed at to avoid monopolies where the firm acquire dominance in the market and can have price control but in case of network goods we need to understand that these goods are innovation when produced and in such scenarios competition is inherent to make people adapt to the product and make them accustomed to so even though the firms present are low but the competition is there against traditional substitutes and to make people adapt to new product. Hence, option A is correct i.e competition in th market is low but compensated by high competition for the market(i.e. to create the market for product)