Sometimes, public goods whose benefits are less than their costs still get produced because:
A) The marginal benefit is still larger than the marginal cost
B) Of externalities in production
C) The benefits accrue to politically powerful government officials and their constituents
D) Of market failures

Question

Quizplus · Accepted Answer

When public goods with benefits that are less than their costs are still produced, it is often due to political factors. These goods may provide benefits that are concentrated to a small group of politically powerful individuals or their constituents who are able to influence the decision-making process. This can lead to the production of public goods that are not socially optimal from an economic perspective.

Sometimes, Public Goods Whose Benefits Are Less Than Their Costs