Solve clearly

3. 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 v .n 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) 4 points At some given point in time there's 11 users on the app. What happens to the network size? Explain! (b) 4 points At some given point in time there's 30 users on the app. What happens to the network size? Explain! (c) 4 points At some given point in time there's 60 users on the app. What happens to the network size? Explain