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Question

The government provides public goods because

A private markets are incapable of producing these types of goods Correct Answer Incorrect Answer
B free-riders make it difficult for private markets to supply the socially optimal quantity Correct Answer Incorrect Answer
C markets are always better off with some government oversight Correct Answer Incorrect Answer
D external benefits will accrue to private producers Correct Answer Incorrect Answer
E all of these Correct Answer Incorrect Answer

Solution

Free-riders make it difficult for private markets to supply the socially optimal quantity so government provides the public goods.

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