A public good will:
A) be efficiently provided by the free market as long as its total benefits exceed its total costs.
B) be efficiently provided by the free market as long as its marginal benefits exceed its marginal costs.
C) be provided in less than efficient quantities by the free market.
D) be provided in efficient quantities by voluntary contributions.

Question

Quizplus · Accepted Answer

Public goods suffer from the free-rider problem, where people can benefit from the good without paying for it. This means that the demand for the public good is likely to be lower than the social optimum, resulting in it being provided in less than efficient quantities by the free market.

A Public Good Will