Public goods could effectively be provided by private markets, but we choose to provide them through government.

Question

Quizplus · Accepted Answer

Public goods are characterized by non-excludability and non-rivalry, meaning that no one can be excluded from their use and one person's use does not reduce availability for others. These characteristics lead to market failure, as private markets struggle to provide these goods efficiently due to the free-rider problem, where individuals have no incentive to pay for a good they can use for free if someone else pays for it. Therefore, government provision is often necessary to ensure these goods are provided.

Public Goods Could Effectively Be Provided by Private Markets, but We