Which of the Following Is a True Statement Regarding Why

question 121

Multiple Choice

Which of the following is a true statement regarding why the government produces public goods?

• A) Public goods are valued highly by some but not by the majority.
• B) Because of the electoral system, the public sector tends towards producing those goods that help politicians get elected.
• C) Some goods should be produced whether they are economically efficient or not.
• D) Because it is difficult to exclude those who do not pay for public goods.

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Definitions:

New Firms

Recently established companies or businesses entering a market.

Dominant Firms

Companies that hold a major portion of the market share in their industry, influencing market conditions and prices.

Average Total Cost

The total cost of production divided by the quantity produced, it measures the average cost per unit of a product.

Competitive Firm

A business that operates in a market with many sellers offering similar or slightly differentiated products, resulting in limited market power for individual firms.