Question

The two main characteristics of a public good are

A. production at constant marginal cost and rising demand.
B. nonexcludability and production at rising marginal cost.
C. nonrivalry and nonexcludability.
D. nonrivalry and large negative externalities.

Answer 1

Answer:

(C) Nonrivalry and nonexcludability.

Explanation:

Nonrivalry:

This simply means that when a good is produced and consumed by the consumers, it does not lower the quantity available for other consumers. It's supply is not affected by other people's consumption.

Nonexcludability:

This means that when a good is produced, it is not possible to stop others from using or benefiting from it. The good is always available to all.