People have little incentive to produce a public good because
A) the social benefit is less than the private benefit.
B) the social benefit is less than the social cost.
C) there is a free-rider problem.
D) there is a Tragedy of the Commons.

Question

Quizplus · Accepted Answer

The free-rider problem arises because individuals can benefit from the public good without contributing to its production, leading to a lack of incentive for individuals or firms to produce it. The other options do not fully capture the reason for the lack of incentive to produce public goods.

People Have Little Incentive to Produce a Public Good Because