Private producers have no incentive to provide public goods because
A)the government subsidy granted is usually insufficient to enable private producers to make a profit.
B)production of huge quantities of public goods entails huge fixed costs.
C)they cannot avoid the tragedy of the commons.
D)once produced, it will not be possible to exclude those who do not pay for the good.

Question

Quizplus · Accepted Answer

Private producers have no incentive to provide public goods because once produced, it will not be possible to exclude those who do not pay for the good. This leads to the free-rider problem where individuals can benefit from public goods without contributing to their production. As a result, private producers cannot capture the full value of their production and may not be able to earn profits.

Private Producers Have No Incentive to Provide Public Goods Because