Public goods are unlikely to be provided by the private sector because
A) the production of the good creates negative externalities.
B) no one can be excluded from the consumption of the good.
C) the consumption of the good creates negative externalities.
D) the exclusion principle does not apply to public goods.

Question

Quizplus · Accepted Answer

Public goods have the characteristic of non-excludability, which means that once the good is produced, nobody can be excluded from enjoying its benefits. Private firms will not produce such goods because they cannot charge individuals for their use, which makes it difficult to make a profit. Therefore, public goods are usually provided by governments or non-profit organizations.

Public Goods Are Unlikely to Be Provided by the Private