If the quantity demanded of a public good is greater than the quantity supplied,
A) an excess quantity demanded emerges, which could be eliminated (corrected) by the government decreasing taxes to allow people to buy more of the good
B) it is proof that market failure exists
C) it is proof that government failure exists
D) an excess quantity demanded emerges, which could be eliminated (corrected) by the government increasing taxes to provide more of the good
E) the market will create the supply to bring the market for the public good into equilibrium

Question

Quizplus · Accepted Answer

When there is excess demand for a public good, the government can intervene by increasing taxes to fund the provision of more of the good, as public goods are typically not supplied efficiently by the market alone.

If the Quantity Demanded of a Public Good Is Greater