All goods that have social value will be profitable for firms in the private sector to produce.

Question

Quizplus · Accepted Answer

While some goods that have social value may be profitable for firms to produce, not all of them will necessarily be so. Certain goods and services may have positive externalities, meaning that the benefits they provide extend beyond the consumer and also impact the wider society. However, firms may not receive enough financial reward for producing these goods, as the value they provide to society is not reflected in their market price. Additionally, some goods may be considered public goods, such as street lighting or national defense, which are necessary for society but cannot be effectively provided by the private sector due to free-rider problems.

All Goods That Have Social Value Will Be Profitable for Firms