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In the context of network goods, what is true for a utility function Ui= ai+ n^α in which the dependent variable Ui is the utility for each additional user and the independent variable n is the number of users.


This is true. In the utility function Ui(ai,f(n)), the stand alone utility is denoted by the variable ai.


This is true. If, on the contrary, the utility increases to the power of two or more with each additional user, the network effect can be regarded as strong.


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