In the case of a private good, which of the following forms of economic organization will result in the strongest incentive for consumers and producers to economize?
A) The good is produced privately and taxes are used to provide it to consumers free of charge.
B) The good is produced privately and consumers purchase it with their own money.
C) The good is produced by government enterprises and the cost of its production is covered by taxes.
D) The good is produced by government enterprises and consumers purchase it with their own money.

Question

Quizplus · Accepted Answer

When a good is produced privately and consumers purchase it with their own money, both consumers and producers have strong incentives to economize. Consumers will seek to maximize their utility given their budget constraints, and producers will aim to minimize costs and maximize profits, leading to efficient resource allocation.

In the Case of a Private Good, Which of the Following