If No One Can Be Excluded from Consuming Its Benefits

question 94

Multiple Choice

If no one can be excluded from consuming its benefits and there is no rivalry in consumption, then the good is a ________ good.

• A) private
• B) Pareto
• C) public
• D) free

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Definitions:

Average Total Cost

The total cost of production divided by the quantity produced, taking into account both fixed and variable costs.

Excess Capacity

The situation where a company is producing less than its full potential output due to lack of demand or other constraints.

Efficient Scale

The level of production at which a firm achieves the lowest average total cost, with economies of scale fully exploited.

Business-Stealing Externality

Negative impacts on existing firms due to entry of new competitors, which can steal customers and reduce profits.