Private Markets Usually Fail to Provide Lighthouses Because

question 22

Multiple Choice

Private markets usually fail to provide lighthouses because

• A)lighthouses cost too much to build relative to their benefits.
• B)government intervention makes it hard for private lighthouse owners to compete in the market.
• C)ship captains have incentives to use lighthouses without paying.
• D)lighthouses are valued very little by ship captains these days.

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Definitions:

Soybean Market

A specific sector of the agricultural market focused on the trading and production of soybeans.

Supply Curve

A graph that shows the relationship between the price of a good and the quantity of the good that suppliers are willing to sell.

Equilibrium Price

The price at which the quantity of a product demanded by consumers equals the quantity supplied by producers, leading to a balance in the market.

Demand Schedule

A chart indicating the amount of a product or service buyers are prepared and capable of buying at different price levels.