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:

Strength

The quality or state of being strong, including physical, mental, or emotional robustness.

Hope

A feeling of expectation and desire for certain things to happen, often seen as a motivator in personal and professional growth.

Expectancy Theory

A motivation theory that suggests that individuals are motivated to perform if they believe their efforts will lead to favorable outcomes.

Motivational Problems

Challenges or hindrances that affect an individual’s drive to take action or achieve goals.