7. Network effects can result in an offering being so popular that it becomes un

Question

7. Network effects can result in an offering being so popular that it becomes unpopular because it is unavailable.

Select one:

a. false

b. true

9. The time period between paying a supplier and receiving compensation from the customer is _____.

Select one:

a. trade cycle

b. inventory turnover cycle

c. cash conversion cycle

d. liquidity period cycle

e. earnings cycle

11. The video game business is said to be a two-sided market. Customers buy a video game console largely based on the number of really great games available for the system. Software developers write games based on:

Select one:

a. the technical capabilities that a video game console can provide.

b. the willingness of video game console manufacturers to support their offerings.

c. their ability to reach the greatest number of paying customers.

d. the availability of similar efforts from their competitors.

e. the revenue sharing agreement they are able to reach with the console manufacturers.

Explanation / Answer

7) False

Network effects are a form of demand side economies of scale that lead to positive feedback. The more widely a piece of software is ,the more valuable it becomes, and more users want to adopt it. Likewise, If a computer program is regarded as unpopular, this perception can feed on itself and spell the demise of that product. With positive feedback strong becomes stronger and the weak get weaker.

9) Cash Conversion Cycle

The cash conversion cycle analyses the speed at which the company converts its stock into sales and its sales into cash, which is then used to pay its suppliers for goods and services

11) the revenue sharing agreement they are able to reach with the console manufacturers

Each of the developer develops games exclusively for that gaming console manufacturing company and enters into a revenue sharing agreement with the manufacture

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