A Collective Consumption Good May Be Inefficiently Produced by the Private

question 16

Multiple Choice

A collective consumption good may be inefficiently produced by the private sector because _____.

• A)it is inefficient to raise price above marginal cost
• B)of free riding problems
• C)fixed costs are too high
• D)private producers are greedy

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Definitions:

Substitutes

Alternatives or replacements for someone or something, typically used in the context of materials, products, or personnel.

BCG Matrix

A strategic planning tool that classifies business units or products into four categories based on market growth and market share.

Question Mark

A term used in the Boston Consulting Group (BCG) matrix to describe a product or business with low market share in a high-growth market, requiring investment to increase market share or divest.

Market Share

The portion of a market controlled by a particular company or product.