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QUESTION

Suppose a firm faces potential demand from two customer bases, H and L, with high and low valuation of the firm's product, respectively.

3. Suppose a firm faces potential demand from two customer bases, H and L, with high and

low valuation of the firm's product, respectively. If the product has network

externalities and all type H customers are currently purchasing the product, then the

price that can be charged to L consumers ________.

A. increases with the number of H consumers

B. decreases with the number of H consumers

C. is independent of the number of H consumers

D. cannot be determined because the price charged to H is not known

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