For a good to be efficiently provided by the private market, which of the following is essential?
A)It is rival in consumption.
B)It is excludable.
C)It is a common resource.
D)It is rival in consumption and it is excludable.

Question

Quizplus · Accepted Answer

For a good to be efficiently provided by the private market, it must be both rival in consumption and excludable. Rivalry in consumption means that the consumption of the good by one person reduces the amount of the good available for consumption by others. Excludability means that it is possible to prevent someone who has not paid for the good from consuming it. Goods that are common resources, such as a fishery or the atmosphere, are difficult to exclude people from using and therefore tend to be overused and under-provided in the absence of government intervention.

For a Good to Be Efficiently Provided by the Private