When a Good Is Nonexcludable

question 68

Multiple Choice

When a good is nonexcludable,

• A) it is impossible or very costly to exclude nonpaying customers from receiving the good.
• B) individuals will have an incentive to become free riders.
• C) it will be difficult for a private firm producing the good to generate revenue sufficient to cover the cost of production.
• D) all of the above are true.

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Definitions:

Net Operating Income

A measure of a company's profitability from its regular business operations, excluding non-operational activities like investments.

Client-Visits

Instances where a service provider meets with clients at their location or the provider's premises for consultation or business purposes.

Planning Budget

A budget developed at the beginning of the budgeting period that is based on projected levels of activity.

Selling

Expenses incurred directly and indirectly in making sales, including advertising, sales commissions, and the cost of sales personnel.