The tendency for the market to under produce public goods and overproduce private goods results from:

Question

Quizplus · Accepted Answer

The tendency for the market to under produce public goods and overproduce private goods is due to the fact that people are reluctant to buy what they can get for free. Public goods are non-excludable, meaning that once they are provided, it is difficult to charge individuals for their use, so people tend to take advantage of them without paying the full cost, leading to underproduction. On the other hand, private goods are excludable, meaning that individuals can be charged for their use, leading to overproduction.

The Tendency for the Market to Under Produce Public Goods