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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

      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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