Question

A rival good A. is exclusive. B. is one that rival firms are trying to obtain. C. cannot be shared. D. is one that is used up as it is consumed.

Answer 1

Answer: Option (D) is correct.

Explanation:

A good is said to be rival in nature if the consumption of that good by one individual will impact the availability of good for the others. This means that less quantity will be available for the others.

For instance, if a city has only one fire station, two fire trucks and four firefighters then it is characterized as rival in consumption because consumption of fire protection by one individual will make the fire protection unavailable for the others, due to its limited availability.

Suppose if there is an emergency call received from about 15 houses then the fire protection have to choose 3 or 4 houses among them because of limited resources. This shows that fire protection is unavailable for others.