question archive The government sometimes provides public goods because: a
Subject:MarketingPrice:2.88 Bought15
The government sometimes provides public goods because:
a. Private markets would not produce any of the goods,
b. Private markets would not produce the efficient quantity of the goods,
c. Private markets would charge too high a price for the goods,
d. The government produces public goods more efficiently than private markets can.
A. Private markets would not produce any of the goods
Reason: The marginal cost of providing another unit of public good is zero. Also, public goods are such that, non paying persons cannot be effectively prevented from using the good. This makes it non viable for the market to produce these goods, but still there is an associated societal desirability for the consumption of the goods. This results in market failure. Thus the government provides the public goods for the greater satisfaction and benefit of the society as a whole.