By polling people, we can calculate the demand for public goods and have the market provide them. But we don't. Instead, we allow the government to pay for and provide those goods because it
A) knows better than individuals what public goods are desirable
B) avoids "special interests" interference in the market
C) can avoid all negative and positive externalities
D) can tax people to finance the production of public goods and thereby prevent free riders
E) can prevent market failure

Question

Quizplus · Accepted Answer

Governments can tax individuals to fund the production of public goods, addressing the free-rider problem where individuals might benefit from a good without contributing to its cost. This is a key reason why public goods are often provided by governments rather than left to the market.

By Polling People, We Can Calculate the Demand for Public