The market produces too few public goods because:

Question

Quizplus · Accepted Answer

Public goods are characterized by non-excludability and non-rivalry, meaning that once they are produced, anyone can benefit from them and their consumption by one individual does not reduce availability for others. This leads to the free-rider problem, where individuals have an incentive to not pay their fair share of the cost of producing the public good, as they can still benefit from it regardless. This creates a market failure, as the private market has no way of efficiently producing public goods due to the broken link between payment and consumption.

The Market Produces Too Few Public Goods Because