Follow the analysis we did in class to build your demand curve (just like the 'Facebook' example): Suppose that there are 200 people in a market for a new fitness app. Maybe it's fun to log into your own account and admire your own results and records and there-fore consumers have a value for this feature alone. This base value, v, for access to the account is uniformly distributed between $1 and $50.

But there's a social aspect to the site that causes it to exhibit network externalities (e.g. Strava, for example). Suppose that the total value to person v is (vn) where n is the number of people who are also consuming the good. Imagine access to the app can be supplied through a constant returns to scale technology so the supply curve is a flat line at the price level that equals average cost. Assume this average cost is $979 (users upload a tremendous amount of content!).

(a)At some given point in time there's 11 users on the app. What happens to the network size? Explain!

(b) At some given point in time there's 30 users on the app. What happens to the network size? Explain!

(c) At some given point in time there's 60 users on the app. What happens to the network size? Explain!