Directions: Smith asserted that property held-in-common that is, usable by every co-owner, would always be used less carefully than private property. Each owner would be inclined to overuse the property held-in-common because the gains would come to the individual alone, while the costs of maintenance that result from overuse would be spread among all co-owners. But a survey comparing 800 properties held-in-common with 1590 private properties showed that the properties held-in-common were in a better condition.

Which of the following, if true, and known by the owners of properties, would best help explain the results of the survey?

With private properties, both the costs and the benefits of overuse fall to the individual owner.

The cost of maintenance that is allocated to any individual co-owner is less easily measured with property held-in-common than it is with private property.

An individual co-owner who overuses property held-in-common might be able to achieve higher returns than other co-owners can, with the result that he or she would obtain a competitive advantage.

If one co-owner of property held-in-common overuses it even slightly, the other co-owners are likely to do so even more, with the consequence that the maintenance costs to each co-owner outweigh the benefits.

There are a larger number of private properties than there are properties held-in-common.