Club goods tend to be offered __________ market price and __________ quantity than what society desires.

Question

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Club goods are non-rival but excludable goods which means they can be consumed by multiple users but only those who pay for them can access them. Since the good is non-rival, the marginal cost of providing it to additional consumers is almost zero. As a result, the firm producing the club good tends to charge a higher price than the marginal cost, leading to a higher market price. The producers have control over the quantity of the good supplied and tend to supply a lower quantity than what society desires in order to keep the price high. Therefore, club goods tend to be offered at a higher market price and lower quantity than what society desires.

Club Goods Tend to Be Offered __________ Market Price and __________

Club Goods Tend to Be Offered Market Price and