The private sector will not provide public goods because:
A) it costs too much to produce.
B) consumers are likely to be free riders.
C) it is provided by government anyway.
D) it takes a long time to change the production.

Question

Quizplus · Accepted Answer

Public goods are non-excludable and non-rival in consumption, meaning that individuals cannot be excluded from consuming them and one person's consumption does not reduce the amount available to others. This creates a free rider problem, where individuals have an incentive to not pay for the public good and still benefit from it. Private firms cannot charge individuals for the benefits they receive, so they will not have an incentive to produce public goods.

The Private Sector Will Not Provide Public Goods Because