Public goods are difficult for a private market to provide due to ?
Correct answer: D. The free-rider problem.
- A. the rivalness problem
- B. the public goods problem
- C. the Tragedy of the Commons.
- D. The free-rider problem.
Explanation
Public goods are non-excludable, so people can benefit without paying, creating the free-rider problem. Private firms then struggle to collect enough revenue to provide them profitably.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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