Public Goods Are NOT Sold in Efficient Quantities in the Marketplace

question 53

Multiple Choice

Public goods are NOT sold in efficient quantities in the marketplace because:

• A) once supplied to a buyer, they can be made available at no cost to someone else.
• B) the more one person has, the less another person has.
• C) they are usually so costly that only the wealthy can afford them.
• D) they are usually very poor quality goods.

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Definitions:

Open Offer

An invitation by a company to its shareholders to purchase additional shares directly from the company at a specified price.

Seasoned Equity Issue

The process by which a company that is already publicly traded issues additional shares to raise new equity capital.

Supply And Demand

The economic model that determines the price of anything in a market, based on the quantity of goods available and consumers' desire for them.

Underpricing

The practice of setting the initial offering price of a security, such as a stock, below its market value.