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Author Question: What are network effects? Provide an example. What will be an ideal ... (Read 19 times)

karen

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on: Jul 7, 2018
What are network effects? Provide an example.
 
  What will be an ideal response?

Question 2

There is little variation in returns on IT investment across firms.
 
  Indicate whether the statement is true or false


bbburns21

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Reply #1 on: Jul 7, 2018
Answer to Question 1

Network effects refer to the increased value of a product or service that results simply because there are more people using it. A large customer base can be significant because of network effects. The value of Facebook, for example, is low if you can only connect a few people. But the more people who use that social network, the more valuable it becomes to everyone.

Answer to Question 2

FALSE


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