Which of the following goods is least likely to be provided by the private sector?
A) a good for which the marginal private benefit to an individual exceeds the marginal cost of producing the good
B) a good characterized by rivalry in consumption from which nonpaying customers can be excluded
C) a good characterized by nonrivalry in consumption from which nonpaying customers can be excluded
D) a good characterized by nonrivalry in consumption from which paying customers cannot be excluded

Question

Quizplus · Accepted Answer

The good characterized by nonrivalry in consumption from which paying customers cannot be excluded is known as a public good. Private sector firms are unlikely to provide public goods because they cannot charge customers for their use and therefore cannot make a profit. Private firms are more likely to provide goods where they can charge customers and make a profit (such as in option A, a good for which the marginal private benefit to an individual exceeds the marginal cost of producing the good).

Which of the Following Goods Is Least Likely to Be