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:

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