Identify the correct statement:
A)Public goods are usually associated with negative externalities.
B)As public goods provide benefits to multiple consumers,it must be provided by the government.
C)Public goods are usually overproduced.
D)Public goods can result in inefficiency even if perfect competition prevails.

Question

Quizplus · Accepted Answer

Public goods provide benefits to multiple consumers and are non-excludable, meaning it is difficult to exclude anyone from enjoying the benefits. Hence, it is more efficient for the government to provide them, as private firms would not be able to capture the full value of the good and may not have the necessary incentives to provide them. The other statements are incorrect.

Identify the Correct Statement