If the benefits of a public good exceed its costs:
A) the market can still provide efficiently if the firm is a price setter.
B) government agencies may either produce the good themselves or pay private firms to produce it.
C) people really don't value the good.
D) the free-rider notion does not apply.

Question

Quizplus · Accepted Answer

When the benefits of a public good exceed its costs, it is still not a profitable venture for a private company to produce it because of the free-rider problem. In this case, government agencies may either produce the good themselves or pay private firms to produce it.

If the Benefits of a Public Good Exceed Its Costs