Final answer:
The statement is false because network effects usually mean that the value of a product or service increases with the number of users. This is due to the potential added value each new user brings to other users by enabling more interactions and enhancing compatibility.
Step-by-step explanation:
The statement that when network effects are present, the value of a product or service decreases as the number of users grows is false. In reality, network effects typically mean that the value of a product or service increases as more people use it. This is because each new user can potentially add value for other users through additional interactions, compatibility, or shared experiences. This principle can be seen in social media platforms, online marketplaces, and telecommunication services where a larger user base generally leads to a more valuable and attractive service.