A Small Network with Fixed Capacity A small network has a fixed capacity of Q₀, resulting in a vertical supply curve, S₀. The intersection of S₀ and D₀ results in an equilibrium price of P₀. As the network expands to S₁, the value to existing and new users increases due to network effects causing the demand curve to pivot to D₁. The intersection of S₁ and D₁ leads to a higher equilibrium price of P₁. This differs from a market for a nonnetwork good, in which an increase in supply leads to a lower price.