When goods are not excludable
A)the goods will be produced as private goods but not as public goods.
B)the goods will not be produced since no one values them.
C)the free-rider problem prevents the private market from supplying them.
D)the private market will produce the goods but will charge less for them than if they are produced as public goods.

Question

Quizplus · Accepted Answer

If goods are not excludable, then it is difficult or impossible to exclude non-payers from enjoying their benefits. This creates a free-rider problem where consumers can enjoy the goods without paying for them. As a result, the private market may not be able to supply these goods because they cannot charge a price that covers the cost of production. Therefore, public goods are often provided by the government to overcome the free-rider problem.

When Goods Are Not Excludable