The Answer Is, "Because of the Free Rider Problem

question 72

Multiple Choice

The answer is, "Because of the free rider problem."  The question is:

• A)Why can't the government produce nonexcludable public goods?
• B)Why can't the market produce nonexcludable public goods?
• C)Why do negative externalities exist?
• D)Why do positive externalities exist?

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Definitions:

Price To Charge

Price to Charge refers to the amount a business decides to set for its product or service, taking into account costs, competitive prices, and profit margins.

Marginal Costs

The additional cost incurred by producing one additional unit of a product or service.

Variable Costs

Costs that vary directly with the level of production, such as materials and labor, in contrast to fixed costs which remain constant regardless of production level.

Homogeneous Products

Goods that are identical in quality and features, making them interchangeable in the eyes of consumers.