Asked by Katlyn Holder on Jul 22, 2024
Verified
The existence of public goods can be a source of market failure.
Public Goods
Goods that are non-excludable and non-rivalrous, meaning they are available for everyone to use without diminishing their availability to others.
Market Failure
Market Failure occurs when the allocation of goods and services by a free market is not efficient, often requiring intervention.
- Gain insight into the principle of market failure and its determinants.
- Realize the contribution that public goods make and the issue of underproduction in an economy driven by market forces.
Verified Answer
HW
Heidi Werther-TinneyJul 26, 2024
Final Answer :
True
Explanation :
Public goods are non-excludable and non-rivalrous, meaning they can be consumed by anyone without reducing their availability to others. Because it's difficult to charge for their use, private markets may underprovide them, leading to market failure.
Learning Objectives
- Gain insight into the principle of market failure and its determinants.
- Realize the contribution that public goods make and the issue of underproduction in an economy driven by market forces.