Distinguish among public goods, private goods, common resources, and natural monopoly goods
What will be an ideal response?
Public goods are nonexcludable and nonrival. As a result, anyone can consume the good whether or not he or she paid for it and one person's use of the good does not decrease the amount available for other people. Private goods are excludable and rival. As a result, only the person who pays for the good can consume it and one person's use decreases the amount available for others. Common resources are nonexcludable and rival. As a result, anyone can consume the good whether or not he or she paid for it and one person's consumption decreases the amount available for other people's consumption. Natural monopoly goods are nonrival and excludable. Potential users of the good can be excluded if they do not pay but once having paid their use of the good is nonrival.
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Refer to Figure 12-13. Suppose the prevailing price is P1 and the firm is currently producing its loss-minimizing quantity. In the long-run equilibrium
A) there will be fewer firms in the industry and total industry output decreases. B) there will be more firms in the industry and total industry output remains constant. C) there will be fewer firms in the industry but total industry output increases. D) there will be more firms in the industry and total industry output increases.
Marginal cost is ____________
a. The revenue from selling an additional unit of output b. none of the above c. The total cost of production d. The cost of producing an additional unit of output