which of the following products are most likely to have significant network externalities? Briefly explain. a....

which of the following products are most likely to have significant network externalities? Briefly explain.

a. Smartphones

b. Dog food

c. Board games

d. LCD televisions

e. 3D televisions

Solutions

Expert Solution

ANSWER-

Network externalities - It is an economic concept which explains that the value of the product or a service gets changes at the number of users increases or decreases. The law of supply statest that as the supply increases the price of the good decreases and it becomes less valuable but there are circumstances when the value increases with increase in number of it's users it is known as positive netwrok externalities.

Based on the above explanation Smartphones are most likely to have significant network externalities because When a customer purchase a smartphone positive externality is created as number of users increases it increases the value to each.

Hence, the answer is option (a.) Smartphones.

Rahul Sunny answered 2 years ago

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