Why Are Private Firms Unable to Produce Public Goods

question 43

Multiple Choice

Why are private firms unable to produce public goods?

• A) Because the government outlaws private firms from producing them.
• B) The marginal cost of production is too high for private production to be possible.
• C) They can produce these goods, but they would not earn any revenue because of the free-rider problem.
• D) The tragedy of the commons means that private firms produce an inefficient amount of public goods.
• E) None of the above answers is correct.

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Definitions:

The Psyche

A term used in psychology to refer to the human mind or soul, encompassing all of the mental processes of an individual.

Psychoanalysis

A therapeutic approach and theory of psychology developed by Sigmund Freud that emphasizes unconscious motivations and conflicts.

Freud's Theory

A set of psychoanalytic theories developed by Sigmund Freud, which emphasize the influence of the unconscious mind, sexual and aggressive drives, and childhood experiences on behavior.

Psychosexual Stages

A core concept of Freudian theory that suggests human development occurs in a series of predetermined stages, each centered around the gratification of libido on different parts of the body.