Suppose you are conducting a research study of the impact of Facebook's acquisition of Instagram in 2011 on the digital social
network market. Your observation of the industry shows that Facebook controlled 90% of the social networking market after
the merger.
Which statement is true?
Just as in markets for non-network goods, the total number of firms, and not the distribution of market share, is the best
indicator of inefficiency in the market for network goods.
Unlike the production of a traditional good by a monopoly, there are no potential antitrust concerns from the
production of a network good. The production of network goods is always efficient.
Just as in markets for non-network goods, market share is the best indicator of inefficiency in this type of market.
Because Facebook is a network good, market share is less important in making a decision than the ability of other
firms to contest the market.