Network effects give Internet firms a boost with respect to first mover advantages.

This is because with network effects

multiple choice 1

whichever firm's network becomes the largest will become the most valuable to potential customers and will therefore attract even more users.

the first internet firm to establish a network has the most influence over any regulation.

only firms with access to proprietary technology can form a network.

networks can be networked to create even more traffic and profits.

When network effects are at play, an increase in the number of people using a given product will shift the demand curve to

multiple choice 2

left and make it more elastic.

the right and make it more inelastic.

left and make it more inelastic.

right and make it more elastic.