A Major Reason Why Public Goods Are NOT Supplied by the Market

question 30

Multiple Choice

A major reason why public goods are NOT supplied by the market is the

• A) free-rider problem.
• B) existence of negative externalities.
• C) fact that no one is willing to pay for them.
• D) fact that public goods are rival.
• E) fact that no firm would be able to earn a profit by producing them.

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Definitions:

Theory

A system of ideas intended to explain something, based on general principles independent of the thing being explained.

Competitive

The condition of the market in which businesses or sellers independently strive for consumers' patronage to gain a profit.

American Industry

Refers to the manufacturing and economic sectors that drive the United States’ economy, encompassing a wide range of goods and services.

Air Pollution

The presence of harmful substances in the air that can cause health issues for living organisms and damage the environment.