Why Are Private Firms Unable to Produce Public Goods

question 8

Multiple Choice

Why are private firms unable to produce public goods?

• A) The tragedy of the commons means that private firms produce an inefficient amount of public goods.
• B) The marginal cost of production is too high for private production to be possible.
• C) Because the government outlaws private firms from producing them.
• D) They can produce these goods, but they would not earn any revenue because of the free-rider problem.
• E) None of the above answers is correct.

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Definitions:

Effective Leadership

The capability of a leader to inspire, influence, and guide others toward achieving organizational goals successfully.

Morally Justifiable

relates to actions or decisions that can be defended on ethical grounds, being in alignment with moral principles or values.

Servant Leadership

A leadership philosophy that emphasizes the leader's role as serving the needs of others first and foremost.

Ethical Leadership

Leadership style characterized by guiding principles that respect the rights and dignity of others, promoting fairness, transparency, and integrity.