Which of the following statements about public goods is true?
A)They cannot be publicly provided.
B)They are unlikely to be provided by private,profit-seeking firms.
C)They are essentially negative externalities.
D)They respond to market signals.
E)The firms producing them must be listed on a public stock exchange.

Question

Quizplus · Accepted Answer

Public goods, by definition, have the characteristics of non-excludability, meaning everyone can benefit from the good even if they don't pay for it, and non-rivalry, meaning one person's consumption of the good doesn't reduce the amount available to others. These characteristics make it unlikely that private, profit-seeking firms will provide them because they cannot charge everyone who benefits and may not be able to make a profit.

Which of the Following Statements About Public Goods Is True