Which Statement Explains Why Free Markets Fail to Produce Public

question 88

Multiple Choice

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

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

---

Definitions:

Wage Trend Lines

Graphical representations showing the direction and movement of wages over a period, indicating patterns or shifts in compensation.

Point Value

A quantitative value assigned to specific actions, achievements, or outcomes, often used in scoring systems or as a measure of performance.

Wage Rate

The amount of compensation an employee receives for performing a specific job, often expressed per hour, day, or unit of work.

Wage Rates

The compensation paid to employees for their labor, typically expressed as an hourly rate, but can also refer to annual salaries or piece rates.