Economics 9708 · AS & A Level · Government intervention in markets

Government intervention in markets — practice question

What is the reason that the government has to fund the production of public goods?

  • AOne person’s consumption of a public good means it is not available for anyone else.
  • BPeople are able to consume public goods without paying for them.
  • CPrivate sector firms will charge a price significantly above cost for public goods.
  • DThe cost of producing public goods is higher in the private sector.

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