The Price Charged for a Nonrivalrous Good Is Socially Optimal

question 10

Multiple Choice

The price charged for a nonrivalrous good is socially optimal if:

• A)the price is zero.
• B)the price is just enough so that revenues equal the production costs.
• C)the price is above zero but less than the marginal cost.
• D)the price is equal to the MC of producing the good.

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Definitions:

Encoding

The process of converting information or data into a specific format for efficient processing, storage, or transmission.

Decoding

The process of interpreting or making sense of a message or information received.

General Equilibrium

The condition that exists when all markets in an economy are in simultaneous equilibrium.

Economic System

The organized way in which a country allocates resources and distributes goods and services in its society.