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21 October, 05:00

The market tends to underproduce public goods because

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  1. 21 October, 05:22
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    Public goods are financed by tax so the government often face political pressures and have to decide what is more desirable to produce. It is difficult to measure the benefits of the public good and therefore difficult to compare with others. Public goods are non-excludable so the free-rider problem arises; people enjoy the use of the good without paying for it.
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