The Nonrival Property of Pure Public Goods Implies That The

question 28

Multiple Choice

The nonrival property of pure public goods implies that the:

• A)benefits enjoyed by existing consumers decline as more consumers enjoy a given quantity of the good.
• B)benefits enjoyed by existing consumers are unaffected as more consumers enjoy a given quan?tity of the good.
• C)good cannot be priced.
• D)marginal cost of producing the good is zero.

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Definitions:

Consumer Surplus

The variance between what consumers are prepared to pay for a product or service and the actual amount they end up paying.

Willingness To Pay

This is the maximum amount a consumer is prepared to spend on a good or service, reflecting the value the consumer places on it.

Demand Curve

A graphical representation showing the relationship between the quantity of a good consumers are willing and able to purchase and its price.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of that good that suppliers are willing to offer for sale.