Public goods are distinguished by two primary characteristics.What are they?
A)nonrivalry and nonexcludability
B)government intervention and low prices
C)market failure and high prices
D)rivalry and exclusivity

Question

Quizplus · Accepted Answer

Public goods are goods that are nonrivalrous, which means that consumption by one individual does not reduce the availability of the good for others to consume, and nonexcludable, which means that it is difficult to prevent access to the good. These two characteristics make it difficult for private firms to profitably provide public goods, creating a market failure that often requires government intervention. Option B is incorrect because government intervention is not a defining characteristic of public goods, and low prices are not necessarily associated with public goods. Option C is incorrect because market failure is a result of the characteristics of public goods, rather than a characteristic in itself, and high prices are not necessarily associated with public goods. Option D is incorrect because rivalry and exclusivity are characteristics of private goods, which are the opposite of public goods.

Public Goods Are Distinguished by Two Primary Characteristics