Q. Explicate why the cost structure associated with many kinds of information goods also services might imply a market supplied by a small number of large firms (at the similar time, some internet businesses such as grocery home deliveries have continually suffered steep losses regardless of scale. Explicate why.) Could lower transaction costs in e-commerce ever make it easier for small suppliers to compete? Network externalities are often an important aspect of demand for information goods also services. (The benefits to customers of using software, participating in electronic markets or using instant messaging increase with the number of other users.) Explain how might network externalities affect firm operating strategies (pricing, output also advertising) also firm size?