The inefficiency for collective consumption goods stems from the fact that _____.

Question

Quizplus · Accepted Answer

Collective consumption goods have a zero marginal cost, which means that the cost of producing an additional unit of the good is zero. However, it is difficult to price these goods because they are often non-excludable and non-rival. This makes it difficult to allocate resources efficiently, leading to inefficiency. Therefore, the inefficiency for collective consumption goods stems from the fact that the marginal cost of the good is zero.

The Inefficiency for Collective Consumption Goods Stems from the Fact