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21 February, 10:27

Public goods represent a market failure because

a. positive externalities are created through their production.

b. by their very nature they are nonexcludable and nonrival which makes it difficult for the private sector to supply them profitably.

c. they are provided by firms with market power.

d. their is incomplete information regarding their quality.

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  1. 21 February, 10:47
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    Public goods are available everywhere and are both non-excludable and non-rivalrous

    They represent a market failure because by their very nature they are nonexcludable and nonrival which makes it difficult for the private sector to supply them profitably. Answer: B

    Public goods are nonrival in consumption and their benefits are nonexcludable
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