Which of the following good is least likely to be provided by the private sector?
A)A good that is nonrival but excludable
B)A good that is nonrival and nonexcludable
C)A good that is rival and excludable
D)A good for which the marginal private benefit to an individual exceeds the marginal cost of producing the good
E)A good for which the marginal private benefit to an individual is less than the marginal cost of producing the good

Question

Quizplus · Accepted Answer

Goods that are nonrival and nonexcludable, such as national defense and clean air, are known as public goods. Because of the nonexcludable nature of public goods, there is a free-rider problem, where individuals can benefit from the good without paying for it. Therefore, the private sector is unlikely to provide these goods as there is no way to ensure that enough people pay for their provision to make it profitable.

Which of the Following Good Is Least Likely to Be