Question

To have a​ monopoly, barriers to entering the market must be so high that no other firms can enter. do network externalites create or remove barriers to​ entry? explain. network externalities
a. removeremove barriers to entry because diseconomiesdiseconomies of scale are so large that one firm can supply the entire market at higherhigher average total cost than can two or more firms.
b. remove barriers to entry because such externalities require multiple firms to provide the goods and services in the network.
c. create barriers to entry because a firm efficiently offers products that satisfy consumer preferences.
d. create barriers to entry because if a firm can attract enough customers​ initially, it can attract additional customers as its​ product's value increases by more people using​ it, which attracts even more customers.
e. createcreate barriers to entry because consumption of a​ firm's product decreasesdecreases the value of goods and services produced by other firms.

Answer 1

The answer is d. create barriers to entry because if a firm can attract enough customers initially, it can attract additional customers as its product's value increases by more people using it, which attracts even more customer.
This happen because as more and more cutomer use the products, the potential customers will see the product as trust worthy because they indirectly obtain other customers' approval, which make them more likely to try and use the product.