The concept of 'Network Externalities' implies that:
A. Only production externalities matter
B. Externalities are always negative
C. The value of a good decreases with the number of users
D. The value of a good or service increases with the number of other users
Answer: Option D
Solution (By JKSSB Mock Tests)
Network externalities exist when the utility that a user derives from a good or service depends positively on the number of other users of the same or compatible goods.
Explanation:
Balance of Trade is the difference between the value of exports and imports of merchandise (goods) only. Balance of payments is a broader concept including services and capital flows.
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