overnment and Product Mar aded Assignment | Read Chapter 26 | Back to As greater

Question

overnment and Product Mar aded Assignment | Read Chapter 26 | Back to As greater less Attempts: Average: 6. Network monopolies Present owners of a network good receive benefits as new buyers purchase the good How do network externalities help a monopoly retain its market power? Goods with network externalities are more likely to receive a government patent. If there are strong network externalities associated with a good, other goods are poor substitutes for it. OBy exploiting network externalities, a firm can become a natural monopoly. Grade It Now Save Continue

Explanation / Answer

Present owners of a network good receive Greater benefits as new buyers purchase the good.

Right answer is :

If there are strong network externalities associated with a good, other good are poor substitute for it.  

lack of substitute provides firm a monopoly power.

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