Question

Annabey Inc., a small candy manufacturing company established in 1937, now has several large units that sell unique flavors of candies and assorted chocolates. When the company started out in 1937, it initially experienced slow growth as it was selling brand new products in the market, but later on, their sales picked up at a drastic speed when customers decided to try their products. The CEO of Annabey credits its growth to all the customers who love their candies and chocolates. Which of the following factors of inimitability is best reflected in this scenario?
A. Positive network externality
B. Time compression diseconomy
C. Virtuous circle
D. Complexity

Answer 1

Answer:

A

Explanation:

Network externality describes the effect a good or service has on a consumer when other consumers are also making use of the product

Positive network externality occurs when the marginal benefit of making use of a good increases as more users make use of the good

An example of Positive network externality is a social media platform. As there are more users on the site, you have more people to interact with.

For Annabey Inc., their growth increased when their their consumer based increased. As more people tried their product and liked it, they recommended the product to more people. this would increase their sales