Ch.16 Flashcards
A network good is a good that people benefit ______ from as ______ people use it.
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Which of the following is NOT a good example of a network good?
automobiles
Network goods are usually sold by monopolies or oligopolies because
consumers want to coordinate on the same standard
A market is contestable if
competitors could credibly enter and take away business from the incumbent
Is electricity distribution a contestable market? Why or why not?
No because there are high fixed costs with eradicating power lines to homes.
The market for mineral water is ______ the market for piped water.
more contestable than
Customer loyalty programs, such as frequent flier programs, tend to lead to
less competition and higher prices
After you have been in a job for a while, you should portray your switching costs as
low so the firm will think they need to pay you more to prevent you from leaving
Hotels often offer reward cards that provided discounts to customers who frequent their establishments. Why do hotels offer these loyalty programs?
to increase switching costs
In a network good’s market
the best product might not be the most popular
