Question

7. The government provides public goods because
a). private markets are incapable of producing these types of goods
b). free-riders make it difficult for private markets to supply the socially optimal quantity
c). markets are always better off with some government oversight
d). external benefits will accrue to private producers​

Answer 1

Explanation:

The correct option is:

b) free-riders make it difficult for private markets to supply the socially optimal quantity.