Which of the following statements is true?
A)A good that is nonrival in consumption must necessarily be characterized by nonexclusion.
B)A good characterized by nonexclusion is always a natural resource and cannot be produced.
C)A good that is nonrival in consumption will neither be produced by private firms nor will it be provided by the government.
D)A good that is nonrival in consumption and has high exclusion costs,will not be produced by private firms.

Question

Quizplus · Accepted Answer

Nonrivalry in consumption means that one person's consumption of a good does not reduce the amount available for others to consume. However, if a good also has high exclusion costs (meaning it is difficult or costly to prevent non-payers from consuming the good), private firms may find it unprofitable to produce and sell the good, as they cannot easily charge consumers. This does not mean such goods won't be produced at all, but rather that they might not be produced by private firms due to the difficulty in recouping costs and earning profits.

Which of the Following Statements Is True