What Is One Difference Between the Demand for a Private

question 40

Multiple Choice

What is one difference between the demand for a private good and that for a public good?

• A)With a private good, each consumer chooses the quantity she wants to consume but with a public good, each consumer chooses the price she is willing to pay for a fixed quantity.
• B)With a private good, each consumer chooses the quantity she wants to consume but with a public good, everyone consumes the same quantity.
• C)With a private good, each consumer receives different amounts of benefit from consuming the product but with a public good, every consumer realises the same amount of benefit from consuming the product.
• D)The marginal benefit from consuming the last unit of a public good always exceeds the marginal benefit from consuming the last unit of a private good because there are externalities in the consumption of the former.

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Definitions:

Average Variable Cost

The total variable cost divided by the quantity of output produced; it represents the variable cost per unit of output.

Marginal Cost

The incremental cost associated with the production of an additional unit of a product or service.

Total Costs

The complete expenses incurred in the process of producing or providing goods and services, including both fixed and variable costs.

Break Even

The point at which total costs and total revenues are equal, resulting in no net loss or gain.