Everyone benefits from street lighting,yet the marginal benefit to any one individual usually falls short of the marginal cost.This is an example of:
A)individual actions whose side effects are not properly taken into account by the market.
B)one party preventing mutually beneficial trades in an attempt to capture a greater share of resources for itself.
C)the unsuitability of some goods for efficient management by markets.
D)regulating self-interest.

Question

Quizplus · Accepted Answer

This is an example of a public good, which is often not efficiently managed by markets because it is non-excludable and non-rivalrous. While everyone benefits from street lighting, it is difficult to exclude individuals who do not pay for it and the marginal benefit to any one person is minimal, leading to inadequate private investment in street lighting. Thus, government intervention is necessary to ensure provision of this public good.

Everyone Benefits from Street Lighting,yet the Marginal Benefit to Any