From the standpoint of economic efficiency, markets tend to provide
A) less of a public good than would be efficient.
B) more of a public good than would be efficient.
C) exactly the amount of a public good that is efficient.
D) none of the above.

Question

Quizplus · Accepted Answer

Markets tend to underprovide public goods because individuals can benefit without paying for them, leading to the free-rider problem. This results in less of the public good being produced than is socially optimal.

From the Standpoint of Economic Efficiency, Markets Tend to Provide