Asked by Prmeeti Verma on Jun 22, 2024
Verified
For nonrival goods like pay-per-view television programs,the private market will lead to _____ from a social perspective.
A) production of too much of the good
B) consumption of too much of the good
C) consumption of too little of the good
D) outsourcing its production
Nonrival Goods
Goods whose consumption by one individual does not reduce availability to others, such as public parks or broadcast television.
Pay-per-view Television
A type of television service by which subscribers can purchase events to view via private telecast.
- Fathom the effects of private market actions towards goods that are both nonexcludable and nonrival on the failure of markets.
- Recognize and explain the issue of overuse and underprovision in relation to common resources and public goods, respectively.
Verified Answer
JS
Jihad SamadJun 27, 2024
Final Answer :
C
Explanation :
Nonrival goods, such as pay-per-view television programs, can be consumed by multiple people without reducing the availability for others. In a private market, the price set for access can lead to underconsumption from a social perspective, as the marginal cost of allowing one more viewer is often very low or zero, but the price can prohibit some potential viewers from consuming the good.
Learning Objectives
- Fathom the effects of private market actions towards goods that are both nonexcludable and nonrival on the failure of markets.
- Recognize and explain the issue of overuse and underprovision in relation to common resources and public goods, respectively.