Why Do Private Producers Have No Incentive to Provide Public

question 15

Multiple Choice

Why do private producers have no incentive to provide public goods?

• A)Because the government subsidy granted is usually insufficient to enable private producers to make a profit.
• B)Because production of huge quantities of public goods entails huge fixed costs.
• C)Because they cannot avoid the tragedy of the commons.
• D)Because once produced, it will not be possible to exclude those who do not pay for the good.

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Definitions:

Ryan Reynolds

A Canadian actor, producer, and entrepreneur known for his performance in various films and co-owner of Aviation American Gin.

Private Property

A legal designation for the ownership of property by individuals or corporations, allowing for the exclusive use and distribution of that property.

Well-Functioning Markets

Markets where resources are allocated efficiently, with prices reflecting the true supply and demand dynamics, and where participants have full information.

Government Intervention

Actions taken by a government to affect the economy, markets, or society, including regulations, policies, or subsidies.