MIT Network Effects Quiz

What are network effects?

• The phenomenon where a product or service gains additional value as more people use it

• The impact of technology on social interactions

• The relationship between supply and demand

• The effect of advertising on consumer behavior

How do network effects influence market competition?

• They create barriers to entry for new competitors

• They have no impact on competition

• They only benefit large companies

• They reduce consumer choice

What is a positive network effect?

• When the value of a product increases as more people use it

• When the value of a product decreases as more people use it

• When a product becomes obsolete

• When a product is only valuable to a small group

Fill in the blank: A classic example of network effects is _______.

What are the risks associated with network effects?

• Market monopolization

• Increased competition

• Lower prices

• Better quality products