Asked by
Nesha Grubbs
on Nov 25, 2024Verified
The market system does not produce public goods because
A) there is no need or demand for such goods.
B) private firms cannot stop consumers who are unwilling to pay for such goods from benefiting from them.
C) public enterprises can produce such goods at lower cost than can private enterprises.
D) their production seriously distorts the distribution of income.
Public Goods
Goods or services that are non-excludable and non-rivalrous, meaning they can be used by everyone without diminishing their availability to others, such as public parks or national defense.
Private Firms
Businesses that are privately owned, not traded publicly on stock exchanges, and typically managed by the owner or shareholders.
- Recognize the challenges and reasons why the market system does not readily produce public goods.
Verified Answer
KL
Learning Objectives
- Recognize the challenges and reasons why the market system does not readily produce public goods.
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