What are network effects Briefly explain the relevance they

What are “network effects”? Briefly explain the relevance they hold in an economic context. Find a recent example in the press.

Solution

Network effects depends on numbers of other people using it as network effect is defined as effect where the one user of it has value of that product on other people.

Examples could be Telephone, more number of people owning a phone, the more value of it.Mostlty network effect gives positive externalities like in eg of telephone but some places there could be negative network effects.

In economic context the relevance they hold is the cost / value of it . Like if we have positive externalities and network effect then the cost is directly proportional to impacting economy and when there is negative externalities then inversly proportional