The production of economically desirable public goods must be sponsored by government because: the law of...

The production of economically desirable public goods must be sponsored by government because:

		the law of increasing marginal opportunity costs does not apply to public goods.
		the existence of large external costs precludes their production in the private sector.
		the benefits derived from their production exceed the costs of producing them.
		public goods have characteristics which make it difficult or impossible for private firms to produce them profitably.

Expert Solution

Ans) the correct option is d) public goods have characteristics which make it difficult or impossible for private firms to produce them profitably.

It is difficult for private firms to produce public goods profitablly so public goods must be sponsored by government.

Rahul Sunny answered 2 years ago

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