alleryStart learning →New knowledge often becomes what economists refer to as:
AA private good
BA rival good
CAn inferior good
DA public good
Answer & Solution
Correct answer: D. A public good
1. Ideas behave differently from physical goods once they exist.
2. In this way, new knowledge often becomes what economists refer to as a public good.
3. One firm using an idea does not stop another from using it too.
4. That is why the private sector underinvests in producing it.
_Source: OpenStax Principles of Microeconomics for AP(R) Courses 2e (CC BY 4.0), Ch 13 'Positive Externalities and Public Goods', sections 13.1-13.4_
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