Question

A bandwagon effect is an example of negative network externality in which a consumer wishes to possess a good in part because others do."

"The demand for washing machines is more elastic in the short run than the long run."

true or false with explain

Answer 1

Both statements are incorrect / false

Bandwagon effect is a positive network externality in which if few consumers are purchasing a particular product, it encourages other consumers to buy the same. Due to this there are positive spillover effects

Demand for most of the products is more elastic in the long run when there are various substitutes available and that consumer has ample time to change its preferences or habits. in the short run however there is not enough time to make changes and hence demand is generally inelastic