Most nonrival private goods are priced ______ marginal cost.
A) above
B) below
C) at
D) indeterminately compared with

Question

Quizplus · Accepted Answer

Nonrival private goods are goods that can be consumed by multiple individuals without reducing the amount available for others. Since these goods have excludability, they can be priced above marginal cost to generate profit for the producer. For example, a software program can be used by multiple users without affecting the available quantity, but the producer can charge each user for the access to the program. Therefore, nonrival private goods are often priced above marginal cost.

Most Nonrival Private Goods Are Priced ______ Marginal Cost