If the quantity of public goods produced were decided by market forces (supply and demand),
A) there would be more goods provided than would be optimal
B) there would be fewer goods provided than would be optimal
C) the markets would provide the optimal number of goods
D) prices would be optimal, but the optimal quantity of goods would not be produced
E) the firms producing the public goods would earn excess profit

Question

Quizplus · Accepted Answer

Public goods are non-excludable and non-rivalrous, meaning they can be consumed by anyone without reducing their availability to others. Market forces typically underprovide public goods because firms cannot easily exclude non-payers (free riders) from using them, leading to less production than is socially optimal.

If the Quantity of Public Goods Produced Were Decided by Market