Chapter 76, Problem 4MCQ

To determine

The market provision of the public good.

Answer to Problem 4MCQ

From the available options, the correct option is an inefficiently low quantity of the good and an inefficiently high price.

Explanation of Solution

The market provision of public goods results in an inefficiently low production of goo and high prices because the inefficient distribution of goods in the market causes a low quantity of goods and producers cannot easily sell the goods to consumers such as payment of taxes etc. raising the price of goods.

Therefore, the quantity would not be efficient or high and the price would not be inefficiently low or efficient which means the correct option is d (inefficiently low quantity of the good and an inefficiently high price).

Economics Concept Introduction

Introduction: Excludable refers to the situation when according to people's willingness to pay, producers can prevent certain people from using or consuming goods and services. And, a rival in consumption means if one person consumes a good or service, then it reduces the number of available goods and services for consumption by another.

A public good covers both non-excludable as well as non-rival. And, a private good is excludable and rival in consumption which may prevent people from consuming when one person consumes the same good.