A fundamental reason that governments provide public goods is

Question

Quizplus · Accepted Answer

Governments provide public goods because of the free-rider problem. Public goods are non-excludable, meaning that individuals cannot be excluded from using them, and non-rivalrous, meaning that one person's use does not diminish the availability to others. This creates an incentive for individuals to not pay for the good and still benefit from its provision, which leads to underinvestment in public goods. The government provides public goods to overcome this problem and ensure that they are provided at an efficient level.

A Fundamental Reason That Governments Provide Public Goods Is