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Consider the following statements about digital firms. Digital firms typically have low or zero marginal cost (MC) for providing services to additional users. Digital firms
Consider the following statements about digital firms. Digital firms typically have low or zero marginal cost (MC) for providing services to additional users. Digital firms typically have low or zero average (AC) for providing services to additional users. Digital firms often have economies of scale that may generate natural monopoly. Digital firms often have diseconomies of scale that discourage natural monopoly. Digital firms typically face highly elastic demand and set low or zero prices for their main products so as not to lose customers to rival firms. Digital firms typically face highly inelastic demand and set low or zero prices for their main products so as not to lose customers to rival firms. Digital firms typically face highly elastic demand and set high prices for their main products because there are so few rival firms. Digital firms typically face highly inelastic demand and set high prices for their main products because there are so few rival firms
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