From the standpoint of economic efficiency, competitive markets 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

Competitive markets tend to underprovide public goods because these goods are non-excludable and non-rivalrous, leading to the free-rider problem where individuals have little incentive to pay for their provision.

From the Standpoint of Economic Efficiency, Competitive Markets Provide