Which of the following is true of public goods?

Question

Quizplus · Accepted Answer

Public goods are non-excludable and non-rivalrous, meaning consumption by one person does not prevent consumption by another. This is a defining characteristic of public goods. A) is incorrect because public goods are not efficiently allocated by the market mechanism. B) is incorrect because payment for public goods cannot be efficiently provided by market prices due to the free-rider problem. D) is incorrect because the production of public goods is often guided by government intervention rather than market prices. E) is incorrect because voluntary contributions are often insufficient to finance the production of public goods.

Which of the Following Is True of Public Goods