Which Statement Explains Why Free Markets Fail to Produce Public

question 301

Multiple Choice

Which statement explains why free markets fail to produce public goods?

• A) Firms do not want to produce the good because they fear competition will drive the price down below costs.
• B) Consumers do not want to buy the good because the price is higher than the value of benefits they would receive.
• C) Firms do not want to produce the good because they believe external costs will eat up their profits.
• D) Consumers do not want to buy the product because each hopes that someone else will buy it and then all consumers will be able to have the product at no personal cost.

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Definitions:

Time-out

A behavioral correction method that involves temporary isolation or removal from a stimulating environment to decrease undesirable behaviors.

Appropriate Behavior

A set of actions or conduct that is considered correct or suitable in a given context.

Response Facilitation

A phenomenon whereby the occurrence of some behaviors increases rather than decreases after the application of an aversive stimulus.

Suppressed

This term implies that something, such as an expression, activity, or data, has been deliberately withheld, reduced, or inhibited.