A network externality refers to a situation where:
A) the value of a product increases as more consumers start to use it.
B) firms collude to sell products at a price higher than the equilibrium market price.
C) a firm that has control over key resources auctions the resources off to other firms.
D) the government interferes to prevent the concentration of market power in the hands of a few firms.
Question 2
How does the text distinguish between government and the market?
A) The government is the place around the capital city; the market is everywhere else.
B) The government is populated with publicly-spirited people; the market is populated with selfish people.
C) The government is based on cooperation; the market is based on competition.
D) In all of the above ways.
E) In none of the above ways.
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