Asked by
Zachary Thompson
on Oct 26, 2024
Verified
Public goods are NOT sold in efficient quantities in the private marketplace because:
A) once supplied to a buyer,they can be made available at no cost to someone else.
B) the more one person has,the less another person has.
C) they are usually so costly that only the wealthy can afford them.
D) they are usually very poor-quality goods.
Efficient Quantities
The levels of production or consumption that optimize the use of resources and maximize value creation or utility.
Public Goods
Goods or services that are available for everyone to consume, irrespective of who pays for them, characterized by their non-excludability and non-rivalry.
Private Marketplace
A trading environment usually reserved for qualified participants, where transactions are not open to the public or general market participants.
- Grasp why public goods lead to market failure when provided through the private market.
- Understand how the free-rider problem affects the provision of public goods.
Verified Answer
AL
Learning Objectives
- Grasp why public goods lead to market failure when provided through the private market.
- Understand how the free-rider problem affects the provision of public goods.