Why will a private market be unable to produce the efficient quantity of public goods?
A) because the good's marginal cost is too low
B) because the good is nonexcludable, so there is the free rider problem
C) because the good is rival, so no one will want to pay the producer for it
D) All of the above answers are correct.

Question

Quizplus · Accepted Answer

Public goods are nonexcludable, meaning people can benefit from them without paying, leading to the free rider problem where individuals have little incentive to pay for the good, resulting in underproduction in a private market.

Why Will a Private Market Be Unable to Produce the Efficient