A Lighthouse Might Be Considered a Private Good If

question 261

Multiple Choice

A lighthouse might be considered a private good if

• A)there is a second lighthouse nearby, thus preventing a monopoly.
• B)the owner of the lighthouse is able to exclude beneficiaries from receiving the benefits of the lighthouse.
• C)ships are able to enjoy the benefits of the lighthouse without paying for the benefit.
• D)a nearby port authority is able to avoid paying any fees to the lighthouse owner.

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Definitions:

Elasticity of the Demand

A measure of how the quantity demanded of a good responds to a change in its price.

Technological Changes

Innovations or improvements in technology that enhance productivity, efficiency, or quality in the production of goods and services.

Monopoly Power

The exclusive control or possession of the supply or trade in a commodity or service, often eliminating competition.

Elastic

Describes a market condition where the quantity demanded or supplied of a good or service is sensitive to changes in its price.