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The role of markets

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Question 29

Which of the following explains why the free market fails to provide pure public goods, requiring government provision?

The existence of positive externalities causes overproduction by private firms.

Non-excludability makes it impossible to charge consumers directly, resulting in a missing market.

Information asymmetry prevents consumers from understanding the utility of the good.

High rivalry in consumption implies that one person's use reduces the availability to others.

The role of markets Questions

  1. A Level
  2. /Economics
  3. /The role of markets