In the absence of government involvement,the problem that public goods impose on a market system is that

Question

Quizplus · Accepted Answer

In the absence of government involvement, there is no incentive for firms to produce public goods because they cannot exclude non-paying consumers from benefiting from the good. Therefore, firms will not invest in the production of public goods, resulting in too little of the good being produced. This is known as the free rider problem, and it is a key reason why government intervention is necessary to provide public goods.

In the Absence of Government Involvement,the Problem That Public Goods