Which of the followings statements is/are true about private goods?

I. Rivalrous in consumption

II. Non-excludability

III. Negative marginal cost 

This question was previously asked in
SSC CPO 2024 Official Paper-I (Held On: 27 Jun, 2024 Shift 2)
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  1. Only II 
  2. Only III
  3. Both II and III
  4. Only I

Answer (Detailed Solution Below)

Option 4 : Only I
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SSC CPO : General Intelligence & Reasoning Sectional Test 1
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Detailed Solution

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The correct answer is 4 Only.Key PointsPrivate Goods:

  • Private goods are characterized by being rivalrous in consumption, meaning that one person's consumption of the good reduces the amount available for others. Hence, Statement I is correct.
  • Private goods are also excludable, meaning that it is possible to prevent people who have not paid for the good from consuming it. Hence, Statement II is incorrect.
  • Private goods typically have a positive marginal cost of production, not negative. Hence, Statement III is incorrect.
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