Non- rival consumption Assignment Help

Assignment Help: >> Theory of market failure - Non- rival consumption

Non-rival consumption:

A good is non-rival in consumption when, with a given level of production, consumption by one person need not diminish the quantity consumed by anyone else. In other words, a number of people may simultaneously consume the same good. The cost of extending the service or providing the good to another person is zero. i.e. there is no additional marginal cost involved. Most of the goods and service that we deal in economics are rival in consumption. For e.g. production of hamburgers, watches, shoes, cars, etc.  The more you consume the less will be available for others. Thus rationing problem arises among rival (or competitive) consumers, which is resolved by the price system.  In case of non- rival goods no such problem arises.

Example

a) National defense - as antimissile system reduces the likelihood of foreign attack and simultaneously protects a large number of people.

b) A flood control project benefits people living in that region as well as people living in other regions.

c) All the persons can use weather forecasting information.

d) Pollution abatement benefits all equally in the region.

e) Public health measure reduces the spread of diseases and thus benefits all in the region.

f) When a television programme is broadcast, any number of people (in the relevant area) can receive the signal and watch it without interfering with the reception of others.

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