Which of the followings statements is/are true about private goods?
I. Rivalrous in consumption
II. Non-excludability
III. Negative marginal cost
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. Only I.
The true statements about private goods are:
I. Rivalrous in consumption - Private goods are rivalrous, meaning that one person's consumption of the good reduces its availability for others.
II. Excludability - Private goods are excludable, meaning that it is possible to prevent others from using the good if they do not pay for it.
III. Negative marginal cost is not generally true for private goods. Private goods usually have a positive marginal cost associated with their production and distribution.